This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Mortgage Default Rate Spikes In June: LPS

NEW YORK ( TheStreet) -- The national mortgage delinquency rate rose sharply in June, after declining for five consecutive months, according to a "First Look" mortgage monitor report from Lender Processing Services (LPS).

The percentage of borrowers who are 30 days or more past due on their mortgage loans but not in foreclosure rose to 6.7%. That's an increase of 10% from the previous month and is at the highest level since February.

Some of this increase is seasonal, according to LPS, though the seasonal increase is usually not this large. Last June, the default rate rose by 3.4%.

The foreclosure inventory rate, meanwhile, continues to decline as banks process fewer foreclosures and opt for short sales and loan modifications instead. Foreclosures declined 4% in June from the previous month and are down 30% year-over-year.

In total, there are about 4.8 million U.S. residential properties that are either 30 or more days delinquent or in foreclosure.

Default rates are still above normal, but they are at lower than they have been in four and a half years prior to February, a sign that the housing market is healing. Rising home prices have more recently reduced the rate of new problem loans, but banks are still dealing with defaults from loans originated during the housing boom.

Most banks, including JPMorgan Chase (JPM - Get Report), Wells Fargo (WFC - Get Report), Bank of America (BAC - Get Report) and Citigroup (C - Get Report), saw strong improvements in credit quality during the second quarter.

For more on bank earnings, see Credit Improvements Still Boosting Bank Profits.

-- Written by Shanthi Bharatwaj in New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
C $52.90 0.00%
BAC $15.64 0.00%
JPM $62.60 0.00%
WFC $54.70 0.00%
AAPL $130.28 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs