Payment delinquencies stretch to record length

JACKSONVILLE, Fla. – Despite first-time foreclosure starts falling to near three-year lows in June, the average time that payments have not been made on homes in foreclosure reached a record 599 days in July, according to Lender Processing Services Inc.
In addition, 42 percent of the nearly 1.9 million loans that are 90 days or more delinquent but not yet in foreclosure have not made a payment in more than a year.
At the end of June, there were 4.1 million loans in the United States that were either 90 or more days delinquent or in foreclosure, levels that were two and eight times, respectively, their pre-housing crisis levels.
One reason for the recent pressure to at least rent out homes that have been foreclosed is the slow pace of sales of those homes. At the current rate, the average time it would take to sell foreclosed homes and those with loans that are 90 days or more delinquent but not yet foreclosed in states that have judicial foreclosure processes in place (not all states use a judicial process) would be 111 months, according to LPS. For those states that do not have judicial processes in place, the average amount of time to work through that inventory backlog would be about 32 months. Rhode Island does not have a judicial foreclosure process.
LPS’s July Mortgage Monitor also revealed that the five states with the highest percentage of non-current loans (a combination of foreclosures and delinquencies as a percentage of active loans in that state) were Florida, Mississippi, Nevada, New Jersey and Illinois. The five states with the lowest percentage of non-current loans were Montana, Wyoming, Alaska, South Dakota and North Dakota.