LPS' September Mortgage Monitor: Interest Rates for Majority of Hybrid ARMs Unlikely to Increase; Prepayment Speed of HARP

 LPS' September Mortgage Monitor: Interest Rates for Majority of Hybrid ARMs
 Unlikely to Increase; Prepayment Speed of HARP-Eligible Loans Drops Sharply

PR Newswire

JACKSONVILLE, Fla., Nov. 4, 2013

JACKSONVILLE, Fla., Nov. 4, 2013 /PRNewswire/ -- The September Mortgage
Monitor report released by Lender Processing Services (NYSE: LPS) found that
the majority (63 percent) of outstanding hybrid adjustable-rate mortgages
(ARMs) have already reset from their initial interest rates. Within the loans
that have not reset, approximately 75 percent were originated in post-crisis
years, when over 60 percent of loans had credit scores of 760 and above. As
LPS Senior Vice President Herb Blecher explained, these numbers bode well for
the performance of ARMs as mortgage interest rates are expected to rise in the

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"Only 36 percent of outstanding hybrid ARMs are in a pre-reset status, and the
vast majority of those are coming from newer vintages where loan quality has
been pristine," said Blecher. "That being the case, LPS looked closely at the
remaining segment of pre-reset loans originated during the bubble years where
underwriting criteria was not nearly as strict as post-crisis criteria --
since it is these borrowers who could arguably be most negatively impacted by
upward resets in their monthly mortgage payments -- and sees little cause for
concern. With interest rate indices near historically low levels, we found
that they would need to rise on the order of 300 basis points for most of
these pre-crisis hybrid rates to increase. Most of these borrowers are more
likely to be looking forward to a reduction in payments, rather than an
increase (though periodic rate floors may limit these decreases).

"However, rising rates have had a significant impact on prepayment speeds,
which are now at their lowest levels since May 2011. LPS saw prepayments
decline across all investor categories, with GNMA and GSE segments seeing the
steepest drops – both down over 50 percent since rates began their climb back
in May. HARP-eligible loans – GSE loans with loan-to-value ratios of 100
percent or greater – have dropped sharply as well, declining over 40 percent.
Finally, since interest rates drive refinances and refinances have been
driving prepayments and originations, overall origination activity has
declined as well, down more than 9 percent from last month and nearly 18
percent year-to-date. "

Tapping data once again from the LPS Home Price Index, this month's Mortgage
Monitor looked at residential real estate transactions through August and
found that year-to-date home sales remain at their highest levels since 2007.
Distressed sales (both REO and short sales) continue to make up a smaller
percentage of overall transactions. Of these, short-sale volumes accounted for
46 percent of distressed transactions in August -- a declining share, but
still historically high. While up 9 percent year-over-year, at just 0.4
percent month-over-month growth, home price appreciation is beginning to show
signs of seasonal slowing. However, the pace of home price appreciation in
2013 is still greater than it was in 2012.

As reported in LPS' First Look release, other key results from LPS' latest
Mortgage Monitor report include:

 Total U.S. loan delinquency                           6.46%
 Month-over-month change in delinquency rate:       4.23%
 Total U.S. foreclosure presale inventory rate:        2.63%
 Month-over-month change in foreclosure presale        -1.29%
inventory rate:
 States with highest percentage of non-current*        FL, MS, NJ, NY, ME
 States with the lowest percentage of non-current*     WY, MT, AK, SD, ND
*Non-current totals combine foreclosures and delinquencies as a percent of
active loans in that state.
Totals are extrapolated based on LPS Data & Analytics' loan-level database of
mortgage assets.

To view the Mortgage Monitor Snapshot series, LPS' video version of the
Mortgage Monitor, go to

About the Mortgage Monitor
LPS manages the nation's leading repository of loan-level residential mortgage
data and performance information on nearly 40 million loans across the
spectrum of credit products. The company's research experts carefully analyze
this data to produce a summary supplemented by dozens of charts and graphs
that reflect trend and point-in-time observations for LPS' monthly Mortgage
Monitor Report. To review the full report, visit

About Lender Processing Services
LPS (NYSE: LPS) delivers comprehensive technology solutions and services, as
well as powerful data and analytics, to the nation's top mortgage lenders,
servicers and investors. As a proven and trusted partner with deep client
relationships, LPS offers the only end-to-end suite of solutions that provides
major U.S. banks and many federal government agencies the technology and data
needed to support mortgage lending and servicing operations, meet unique
regulatory and compliance requirements and mitigate risk.

These integrated solutions support origination, servicing, portfolio retention
and default servicing. LPS' servicing solutions include MSP, the industry's
leading loan-servicing platform, which is used to service approximately 50
percent of all U.S. mortgages by dollar volume. The company also provides
proprietary data and analytics for the mortgage, real estate and capital
markets industries. Lender Processing Services is a Fortune 1000 company
headquartered in Jacksonville, Fla. For more information, please visit

SOURCE Lender Processing Services

Website: http://www.lpsvcs.com
Contact: Media contact: Michelle Kersch, (904) 854-5043,
Michelle.kersch@lpsvcs.com, Investor contact: Nancy Murphy, (904) 854-8640,
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