(Read More: Map: Tracking the US Real Estate Recovery)

The settlement’s monitor, former North Carolina Banking Commissioner Joseph A. Smith noted, “a significant increase,” in consumer complaints in the second half of 2012.

In a February 2013 report he reported 5,700 consumer complaints submitted to his office, about half of which related to problems with loan modifications or customer service.

The banks have extended close to $46 billion in gross relief to more than 550,000 borrowers under the settlement so far, according to the Office of Mortgage Settlement Oversight. Thousands of borrowers have had their mortgage principal slashed under the settlement, which should reduce future delinquencies. Negative equity is a primary driver of new delinquencies, a fact all too clear in a new report Monday from Lender Processing Services.

“Looking at the March data, we see that borrowers with equity are actually outperforming the national average—at 0.6 percent, this group is quite close to pre-crisis norms,” said Herb Blecher of LPS Applied Analytics, which released the delinquency report Monday.

(Read More: Housing Recovery Shows Up In Job Gains)

“The further underwater a borrower gets, the higher those problem rates rise. Borrowers with loan-to-value (LTV) ratios of just 100-110 percent are actually defaulting at more than twice the national average. For those 50 percent or more underwater, we see new problem rates of 4 percent.”

Article source: http://www.cnbc.com/id/100710946

(Read More: Mortgage Deduction Is Popular, but Few Claim It)

Nearly one third (1.3 million) of sales in the past twelve months have been distressed, either REO (bank-owned homes) or short sales, according to LPS. That compares to just 226,000 in 2005 when overall home sales were twice the pace they are today.

It doesn’t stop there. The California Homeowners Bill of Rights goes into effect January 1, 2013. Similar legislation in Nevada doubled the foreclosure pipeline over the past year.

Another reason for the drop in new foreclosures may be a surge in loan modifications involving principal reduction. These are also mandated by the mortgage servicing settlement. Principal reduction modifications jumped 62 percent from October to November, according to Amherst Securities’ Laurie Goodman.

(Read More: Mortgage Applications Rose Last Week)

Article source: http://www.cnbc.com/id/100280694

For the first time in years, a guy who quantifies the foreclosure crisis got to report some good news.

Kyle Lundstedt’s colleagues at LPS Applied Analytics call him Dr. Doom, as he calculates all the numbers for the monthly Mortgage Monitor Report.

But this month he got to report a drop in mortgage delinquencies, down more than 11 percent month-over month, to the lowest level since 2008.

“We’re starting to see that there are a lot of folks who are still hanging in there,” says Lundstedt. “The population is a better credit quality population.”

The subprimes, Alt-A’s, the bad lending of the housing boom, have largely moved through the system already, not to mention that big banks and servicers are getting far more aggressive with loan modifications. One quarter of the loans that were more than 90 days delinquent last year are now current. That’s not to say they will all stay current, but that’s a good sign.

Unfortunately, that’s all Dr. Doom could muster on the bright side: “It’s progress; it’s not game-changing.”

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