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LPS Mortgage Monitor

April 2012 Mortgage Performance Observations

Data as of March, 2012 Month-end

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March 2012 First Look

McDash Online Release: April 17th

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DQs are at lowest level since Aug-08,

FC inventory still near historic highs

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Q1 2012 decline in delinquencies was

13% vs. historical average of 14.2%

Average Q1
Decline: -14.2%

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Despite slightly higher interest rates,

prepayments increased in March

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Increase in March prepayment rates

was broad based across investor

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The increase in prepayment rates also

extended to lower credit scores

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Originations increased from January

lows.

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Y/Y non-current % in non-judicial

states declined; judicial is unchanged

Average year over year change in non-current percent

(includes loans 30+ Delinquent or in Foreclosure)
Judicial = 0.25%
Non-judicial = -7.8%
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Seriously DQ inventory has declined

in both judicial and non-judicial states

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Foreclosure inventory in judicial

states remains at all-time highs

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New problem loan rates continue to

improve nationally

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Seasonal peak in cures was lower

than the prior four years

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Foreclosure starts: First-time

foreclosures at 5 month high

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FHA foreclosure starts are on the rise

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FHA/GNMA foreclosure inventory

shows steady increase

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Low foreclosure sales are keeping

aged inventory % at historic highs

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Most foreclosure outflow

remains in the delinquent pipeline

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Foreclosure sales were at their lowest

level since December 2010

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Foreclosure sales dropped sharply

in non-judicial states

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FC sale decline was exclusively in

private and portfolio owned loans

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Pipeline ratios in the northeast and a

handful of other states are still severe

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National pipeline ratios are declining

but still differ sharply by region

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LPS Applied Analytics:

Mortgage Monitor Disclosures
Includes p
product definition and extrapolation
p
methodology

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Disclosure Page: Product Definitions as of June month-end

month end Data

*Conforming limits do not account for temporary or high-cost area

increases.

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Disclosure Page: Metrics Definitions

Total Active Count: All active loans as of month-end including loans in any state of delinquency or
foreclosure. Post-sale loans and loans in REO are excluded from the total active count.
Delinquency Statuses (30, 60, 90+, etc): All delinquency statuses are calculated using the MBA
methodology based on the payment due date provided by the servicer. Loans in foreclosure are
reported separately and are not included in the MBA days delinquent
delinquent.
90 Day Defaults: Loans that were less than 90 days delinquent in the prior month and were 90 days
delinquent, but not in foreclosure, in the current month.
Foreclosure Inventory: The servicer has referred the loan to an attorney for foreclosure. Loans
remain in foreclosure inventory from referral to sale
sale.
Foreclosure Starts Any active loan that was not in foreclosure in the prior month that moves into
foreclosure inventory in the current month.
Non-Current: Loans in any stage of delinquency or foreclosure.
Foreclosure Sale / New REO: Any loan that was in foreclosure in the prior month that moves into
post-sale status or is flagged as a foreclosure liquidation.
REO: The loan is in post-sale foreclosure status. Listing status is not a consideration, this includes all
properties on and off the market.
Deterioration Ratio: The ratio of the percentage of loans deteriorating in delinquency status vs. those
improving.

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Disclosure Page: Product Shifts pre and post-June

post June 2010 Report

The table below contains the counts using the definitions implemented with the
June 2010 and the change in count and percentage from those used prior.
Counts are based on May 2010 Data Active Loans (excludes post-sale and paid
in full)

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Disclosure Page: Product Shift Matrix, pre and post-June

post June 2010 Report

Counts are based on May 2010 Data Active Loans (excludes post-sale and paid in
f ll)
full)

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Disclosure Page: Industry Extrapolations pre and post-June

post June 2010 Report

Mortgage metrics reports produced prior to June 2010 used the following
extrapolation method when estimating full industry numbers:

Active loans (non-REO) are extrapolated based on a 70% market-share assumption.

REO loans prior to March 2009 are extrapolated based on a 40% market
market-share
share assumption
REO loans from March 2009 on contain an additional adjustment for under-reporting by a
specific client.

Mortgage metrics reports produced from June 2010 on extrapolate based on

vintage and product
product. Product coverage is highlighted below
below. Loan counts and
extrapolation are based on May 2010 active loan counts (excludes post-sale
and paid in full):

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Performance Statistics Changes MBA Delinquency

Before = Unextrapolated Values from prior to June 2010 Month-end data
Aft Unextrapolated
After
U
t
l t d = Actual
A t l values
l
ffrom servicing
i i
data
d t reflecting
fl ti
removall off 2
2nds
d
After Extrapolated = Changes with June 2010 data; new products and extrapolations

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Performance Statistics Changes Foreclosure Inventory

Before = Unextrapolated Values from prior to June 2010 Month-end data
Aft Unextrapolated
After
U
t
l t d = Actual
A t l values
l
ffrom servicing
i i
data
d t reflecting
fl ti
removall off 2
2nds
d
After Extrapolated = Changes with June 2010 data; new products and extrapolations

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Performance Statistics Changes: Foreclosure Starts

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Performance Statistics Changes: Database Counts

New Extrapolation and Product Definitions implemented with the June 2010 month
monthend data.

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