Delinquency Rate Down, Foreclosure Supply Up, Report Says

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The mortgage delinquency rate fell last month in the U.S., along with the total number of delinquent mortgages, says a report by a leading lender processor.

The study by Lender Processing Services found that 6,082,000 mortgages in the U.S. were late by at least 30 days or were in a state of foreclosure, compared to 6,167,000 in December of 2011, about a 1.4 percent drop. The LPS report also shows a drop in the year-over-year January delinquency rate -- which excludes homes in foreclosure -- and a slight rise in the month-over-month foreclosure inventory. Both are signs of a recovering economy and subsiding government action against mortgage servicers, experts say.

The total U.S. loan delinquency rate -- which refers to loans of 30 days or more past due, but not loans in foreclosure -- was 7.97 percent, LPS says. That represents a 10.5 percent year-over-year drop from 2011, and a 2.2 percent month-over-month drop from December of 2011. The LPS report examines the just-under 40 million mortgages registered in its loan database. The fall in the national delinquency rate coincides with a survey released earlier this month by the Mortgage Bankers Association that found delinquencies dropped in the last quarter of 2011.

"Mortgage performance continued to improve in the fourth quarter, reflecting the improvement we saw in the job market and broader economy," Jay Brinkmann, chief economist of the Mortgage Bankers Association, told MortgageOrb.com.

Also finding that the foreclosure pre-sale inventory increased month-over-month by 1.1 percent, the LPS report seems to substantiate analyses that suggest that -- even as fewer homes are entering a foreclosure danger zone -- foreclosures that government action had previously stalled are now resuming, in the wake of a recently announced $25 billion settlement.

'We continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw," Brandon Moore, CEO of online foreclosure marketplace RealtyTrac said in a statement earlier this month.

The rise in foreclosures could accelerate, Moore and other experts say, since the nation's five major servicers and state attorneys general recently settled a $25 billion investigation into illegal foreclosures. During the settlement negotiations, many of the servicers delayed moving forward with foreclosures, wanting to keep a low profile in the face of government scrutiny, experts say. Mortgage servicers like LPS, which handle appraisals, titles and closings, have been among those under investigation for "robo-signing," or falsifying signatures on foreclosures and other real estate documents.

The states with the highest percentages of delinquencies and foreclosures combined were Florida, Mississippi, Nevada, New Jersey and Illinois, while the states with the lowest percentages of delinquencies and foreclosures combined were Montana, Arkansas, Wyoming, South Dakota and North Dakota.

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Delinquency Rate Down, Foreclosure Supply Up, Report Says

Location: Trenton, N.J. 
Average Foreclosure Discount: 67.8 percent

Price: $198,500
Beds/Baths: 3/2
Sq. Ft.: N/A

Trenton ranks No. 1 on RealtyTrac's list of cities with the steepest foreclosure discounts. This single-family, whose price was slashed recently, represents one of the killer deals you can find in the city. 

See more foreclosed homes in Trenton, N.J.

Dating back to the 1960s, this Cape Cod-style home offers three bedrooms and two baths. Judging by the average foreclosure discount of New Jersey, the home could be running as much as $150,000 below market value. 

Location: Atlanta 
Average Foreclosure Discount: 49.67 percent

Price: $3.75 million
Beds/Baths: 7/10
Sq. Ft.: 22,000

Foreclosed homes in Atlanta are selling for a staggering 50 percent off, according to data from RealtyTrac. This vacant Mediterranean mansion offers a rather excessive four kitchens along with amenities that include a home theater, pool, spa, steam room and elevator. 

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With its gleaming double staircase, the foyer's richly finished, sparkling-clean interior contrasts with the scene at many foreclosed homes, which often show neglect. 

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At a whopping 22,000 square feet, the home's cavernous interior is distinctly palatial.

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Location: Houston
Average Foreclosure Discount: 48.14 percent

Price: $4.29 million
Beds/Baths: 5/9
Sq. Ft.: 12,129

It may be hard to believe that $4.29 million is a below-market price, but given that this stucco Mediterranean is bank-owned and Houston's foreclosure discount approaches 50 percent, odds are that the home could be quite a deal for a well-heeled buyer. 

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The home has a stone exterior and tile roof, along with a courtyard, pool and outdoor kitchen. The interior stretches 12,129 square feet. 

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After weaving around columns and through arched doorways, you reach the home's library or its fully-contained suite, accessible through its own entrance. 

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Location: St. Louis
Average Foreclosure Discount: 54.61 percent

Price: $89,900
Beds/Baths: 3/2
Sq. Ft.: 1,342

This brick-built home, which dates back to 1930, probably hit the market at a reduced price to begin with, but now is running even lower, having just undergone a price cut. The home offers stained-glass windows and wood flooring along with a spruced-up kitchen. 

See more foreclosed homes for sale in St. Louis.

Pictured here is the home's updated kitchen. The residence is even more of a deal if you factor in its purported HomePath Mortgage status. That means if you've got the right credit, you could snatch it for as little as 3 percent down. 

See more foreclosed homes for sale in St. Louis.

Location: Lansing, Mich. 
Average Foreclosure Discount: 44.31 percent

Price: $124,900
Beds/Baths: N/A
Sq. Ft.: 2,228

Squeezed into a condo community, this historic home stands out in the neighborhood because of its stately portico. The home has a long residential tradition, but could go commercial if the buyer so chooses: The house can serve as an office, according to the listing. 

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The home's portico gives it a tinge of the pastoral era in which it was built. The classic was constructed in 1855. 

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Location: Grand Rapids, Mich. 
Average Foreclosure Discount: 43.45 percent

Price: $289,900
Beds/Baths: 4/4
Sq. Ft.: 4,339

You get a lot of bang for your buck if you buy  this four-bedroom contemporary. Located on a cul-de-sac, the home spans a generous 4,339 feet and offers a three-car garage. At under $300,000, that makes it an affordable luxury residence.  

See more foreclosed homes in Grand Rapids, Mich. 

Along with its expansive interior, the home also boasts its own heated greenhouse, along with a theater and office. 

See more foreclosed homes in Grand Rapids, Mich. 

Location: Flint, Mich. 
Average Foreclosure Discount: 21.55 percent

Price: $109,600
Beds/Baths: 4/3
Sq. Ft.: N/A

Purchase a foreclosed home in Flint and you're likely to enjoy the benefit of more than 20 percent off. While the city's foreclosure inventory doesn't offer deals quite as striking as those found in some other cities wracked by the housing crisis, the town's average foreclosed-home price still falls far, far below the national median (which hovers above $200,000). Flint's average foreclosed-home price is just $60,578. This well-landscaped home demonstrates how far just $110,000 gets you. 

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The home may be a bit bare-bones now, but as the listing asserts, the home has "lots of potential." It comes with a pool, a deck and a two-car garage. 

See more foreclosed homes in Flint, Mich. 

Location: Tampa, Fla. 
Average Foreclosure Discount: 24.97 percent

Price: $143,900
Beds/Baths: 6/4
Sq. Ft.: 2,920

At just $49 per square foot, this cheery home in Tampa, Fla., a city that took has taken a real shellacking from the housing crisis, offers of six bedrooms. 

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The bank-owned property spans nearly 3,000 square feet and boasts a well-equipped kitchen with cherry-stained cabinetry and marble countertops. 

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Location: Easton, Pa. 
Average Foreclosure Discount: 41.17 percent

Price: $29,900
Beds/Baths: 3/1
Sq. Ft.: 1,556

Alright! A listing description that levels with you. "This is a property that needs some work," it states. The home is not without its virtues, however: It offers ample space, three bedrooms and an attic. Furthermore, buyers can acquire 3 percent buyer's assistance if they make an offer by the 31st of this month. 

See more foreclosed homes in Easton, Pa.

One thing buyers should watch out for if they think about shelling out for these digs is that, as with many other foreclosures, there is no seller disclosure for buyers interested in this home. That means, unless you pay for a thorough inspection, you could discover hidden flaws after purchasing the place. 

See other foreclosed homes in Easton, Pa. 

Location: Chattanooga, Tenn. 
Average Foreclosure Discount: 40.39 percent

Price: $129,000
Beds/Baths: 3/2
Sq. Ft.: 1,456

This staid but cozy home is running for $129,000, about $40,000 over the average foreclosed home price in Chattanooga. The home offers a nice porch and decently finished interior. 

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Pictured here is the home's open dining-kitchen area. The place seems to be in pretty good shape for a foreclosed home. Many fall into poor condition, succumbing to insect infestations or other symptoms of neglect. 

See more foreclosed homes in Chattanooga, Tenn.

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