Delinquencies, Foreclosures Soared in September

Today one out of every eight American homeowners with a mortgage (12.5 percent) is either in foreclosure or delinquent in their payments.

Record high rates of foreclosures and delinquencies in September are the latest bad news in the October 2009 Mortgage Monitor LPS, a leading provider of mortgage performance data and analytics.

The nation's September 2009 foreclosure rate rose to 3.12 percent - a month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent. Among individual states, Florida posted the most troubling results with 10.4 percent of loans in foreclosure, and more than 22 percent of loans reported as non-current.

LPS' also found large "shadow" foreclosure and REO inventories─loans and properties stuck in the already clogged pipeline that have yet to complete foreclosure and come to market. The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of foreclosures is on the way. Nearly one-third of foreclosures remain in pre-sale status after 12 months - twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further.

The only good news in the report was increased home sales during September prompted higher loan production totals for 2009 compared to the same time frame in 2008 based on LPS' mortgage data repository covering more than 40 million loans. Year-to-date 2009 loan totals were 2,032,973 (28 percent FHA) versus 1,903,723 (16 percent FHA) for the same period in 2008.

Other key results from LPS' October Mortgage Monitor include:

Total U.S. loan delinquency rate: 9.37 percent

Total U.S. foreclosure inventory rate: 3.12 percent

Total U.S. non-current* loan rate: 12.49 percent

States with most non-current* loans: Florida, Nevada, Mississippi, Arizona, Georgia, California, Michigan, Indiana, Ohio and Illinois

States with fewest non-current* loans: North Dakota, South Dakota, Wyoming, Alaska, Montana, Nebraska, Vermont, Colorado, Oregon and Washington

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.