The December Mortgage Monitor report released by Lender Processing Services (LPS) and covering performance data for the full 2012 calendar year, found that while mortgage delinquency rates remained at elevated levels, they have shown steady improvement, ending the year 32 percent lower than the January 2010 peak. Additionally, following a year of regional improvement in foreclosure inventories (marked by stark contrasts between judicial and non-judicial foreclosure states), the national foreclosure inventory rate began to decline toward the end of 2012 from historic highs experienced during the crisis.

According to LPS Applied Analytics Senior Vice President Herb Blecher, 2012 also saw a return to relatively high levels of mortgage origination activity.

"Though still a long way off from the historic level of originations that preceded the mortgage crisis, 2012 was the strongest full year of originations we've seen since 2007," Blecher said. "Volumes were up approximately 34 percent year over year, with about 8.6 million new loans originated. And, while the majority of these new loans were government-backed — 84 percent in 2012 as compared to just over 50 percent at the peak — the trend over the last four years does suggest a slowly resurgent non-agency lending market."

Leveraging data from the LPS Home Price index, this month's Mortgage Monitor also found that 2012's appreciation in home prices has helped to improve the U.S. equity situation and create even more refinance opportunities: 

• Overall, negative equity is down 35 percent since the beginning of the year.
• Nearly 4 million loans that were below conforming loan-to-value (LTV) thresholds for refinancing last year would meet those standards today. 
• An additional 3.4 million loans that are on the cusp of conforming loan-to-value thresholds stand to benefit, if the home price situation continues to improve.

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

Total U.S. loan delinquency rate: 7.17 percent
Month-over-month change in delinquency rate: 0.7 percent
Total U.S. foreclosure pre-sale inventory rate: 3.44 percent
Month-over-month change in foreclosure pre-sale inventory rate:  -2  percent
States with highest percentage of non-current* loans: Fla., Miss., N.J., Nev., N.Y.
States with the lowest percentage of non-current* loans: Mont., Wyo., S.D., Alaska, N.D.

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Totals are extrapolated based on LPS Applied Analytics' loan-level database of mortgage assets.