LPS' February Mortgage Monitor: Data Shows Seasonal Increase in Loan Cures, Rise in Modification Activity After Two Years of Decline

JACKSONVILLE, Fla., April 10, 2013 /PRNewswire/ -- The February Mortgage Monitor report released by Lender Processing Services (NYSE: LPS) found an increase in loan "cure" rates (those loans that were delinquent in the prior month and are now current). The majority of cures were on loans one-to-two months delinquent, with approximately 500,000 loans curing in February alone. As LPS Applied Analytics Senior Vice President Herb Blecher explained, these cures were not unusual, but rises seen in loans three-to-five months delinquent and foreclosure-initiated categories were unexpected.

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"Historically, we see these seasonal increases in cure rates in February and March each year," Blecher said. "What stood out in this month's data was where that increase was centered. February's rise in cures was driven almost entirely by FHA loans, representing a 29 percent increase from January, and likely driven by revived modification activity related to the revisions to the FHA's Loss Mitigation Home Retention options released late last year.

"We also looked at loan modification data released in the Office of the Comptroller of the Currency's Mortgage Metrics report (aggregated by LPS) and saw that, after two years of steady decline, modification volume increased substantially in the last half of 2012, with about 280,000 modifications occurring during that time," Blecher continued. "The majority of the increases in both Q3 and Q4 occurred in proprietary modifications as opposed to through the Home Affordable Modification Program. Given the current FHA activity, along with the FHFA's recent announcement of its Streamlined Modification Initiative, we could see continued strength in modification volumes in the future."

Additionally, the February data showed that recent increases in mortgage rates have led to a decline in prepayment rates, historically a good indicator of refinance activity. It should be noted that although monthly prepayment rates dropped by nearly 10 percent in February, they are still very high by recent historical standards.

As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:

Total U.S. loan delinquency rate:                                       

6.80%

Month-over-month change in delinquency rate:                     

-3.16%

Total U.S. foreclosure pre-sale inventory rate:                       

3.38%

Month-over-month change in foreclosure pre-sale inventory rate:

-0.98 %

States with highest percentage of non-current* loans:             

FL, NJ, MS, NV, NY

States with the lowest percentage of non-current* loans:          

MT, AK, WY, SD, ND



*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Totals are extrapolated based on LPS Applied Analytics' loan-level database of mortgage assets.

To view the Mortgage Monitor Snapshot, LPS' new video version of the Mortgage Monitor, visit

http://www.lpsvcs.com/LPSCorporateInformation/MultimediaLibrary/Pages/Video-Library.aspx?ListName=Video&ItemName=MMFebruary1-3_1.wmv

About the Mortgage Monitor
LPS manages the nation's leading repository of loan-level residential mortgage data and performance information on nearly 40 million loans across the spectrum of credit products. The company's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for LPS' monthly Mortgage Monitor Report. To review the full report, visit http://www.lpsvcs.com/LPSCorporateInformation/CommunicationCenter/DataReports/Pages/Mortgage-Monitor.aspx

About Lender Processing Services
Lender Processing Services (NYSE: LPS) delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation's top mortgage lenders, servicers and investors.  As a proven and trusted partner with deep client relationships, LPS offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements and mitigate risk.

These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS' servicing solutions include MSP, the industry's leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries.

LPS is headquartered in Jacksonville, Fla., and employs approximately 8,000 professionals. The company is ranked on the Fortune 1000 as the 877th largest American company in 2012. For more information, please visit www.lpsvcs.com.

SOURCE Lender Processing Services, Inc.



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