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LPS Mortgage MonitorAugust 2012 Mortgage Performance Observations

Data as of July, 2012 Month-end

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July 2012 “First Look”McDash Online Release: August 16th

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DQs are down over 30% from peak;FCs still near all-time highs

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Delinquencies and Foreclosures by State

Average year over year change in non-current percent (includes loans 30+ Delinquent or in Foreclosure)

Judicial =-3.1% Non-judicial =-8.7%

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Non-judicial states have experienced greater improvement in non-current rates

Non-Judicial: Down 31% from peak

Judicial: Down 13% from peak

Few non-judicial states remain close to peak levels

Washington, NJ and Vermont are still at historic highs

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New problem loan rates remainslightly higher in judicial states

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Further house price declines could lead to more new problems

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Nationally, 18% of current loans remain underwater

Top 10

StateNegative Equity %

NV 54.7%

GA 42.8%

FL 33.1%

MI 29.8%

AZ 28.4%

IL 27.4%

ID 24.1%

CA 23.7%

MD 23.4%

WA 22.2%

Bottom 10

StateNegative Equity %

DC 3.3%

TX 3.2%

IN 2.9%

MT 2.8%

OK 2.6%

LA 2.5%

IA 2.4%

NE 1.3%

ND 1.0%

WY 0.4%

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Negative equity and new problem loan correlation is clear by geography

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First time foreclosure starts remain near multi-year lows

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While volumes are down, FC starts as a % of 90+ inventory are steady

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Judicial and non-judicial foreclosure starts continue to diverge

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Foreclosure inventory in judicial states is almost 3x non-judicial

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Foreclosure starts outnumber liquidations by 2:1

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Foreclosure sales in judicial states remained flat in July

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Pipeline ratios in judicial states increased slightly

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Pipeline issues in AR are resolving, NY and NJ are still extreme

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Prepayment rates increased as mortgage rates hit historic lows

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June originations at the highest levels since 2010

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Refi participation has been steadily increasing in lower credit scores

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2011 originations have experienced the largest increase in prepayments