LPS: Loan Quality Doesn’t Get Any Better Than This


Residential mortgages originated over the past two years are “among the best quality originations” on record, according to a new report from Lender Processing Services.

Just how good are these loans? Only 6% of 2011 fundings were made to borrowers with credit scores of below 660 and an LTV of more than 80%.

The analytics firm said the pristine credit quality is the likely result of tighter underwriting requirements. “The 2010-11 vintage originations showed 90-day default rates below those of all other years, going back to 2005,” the company said.

According to preliminary figures compiled by National Mortgage News and the Quarterly Data Report, residential lenders funded $1.32 trillion of new loans in 2011, a 21% decline from the year before.

NMN estimates that 6 million loans were funded in 2011. LPS has a lower figure: 5.6 million. In a few weeks NMN will release its final tally for 2011.

In its new ‘Mortgage Monitor’ report LPS said that foreclosure starts were down nearly 40% last year but lenders shouldn’t celebrate quite yet. The improvement was caused by “moratoria, process reviews, and loss mitigation efforts.”

LPS added that delinquencies fell 25% from their January 2010 peak.

And not surprisingly: the foreclosure home sales rate in non-judicial states is four-times that of judicial states.

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