1. Mortgage Delinquencies by State I Quarter 2011

2. All mortgages past due Some of the states that previously ranked the highest with the share of mortgages past due have moved down from the top ranking spots. For example, the percent of mortgages past due in Florida, California, and Nevada are down from their peaks of last year. Past due mortgages have moved from the delinquency status to the foreclosure inventory. Nevertheless, there are still some hotspots in Nevada, Georgia, and Mississippi where the share of past due mortgages are over 10 percent (see slide 3). North and South Dakota continue to far better than the rest of the country. Looking at the sheer size of the past due inventory alone, Florida, California, Illinois and New York, continue to have more than 100,000 past due loans (slide 4). These are also some of the most populous states as well. The change in the total number of past due loans over the last quarter was greatest in California with more than 27,000 fewer loans in the inventory. Unfortunately, many of the eastern states and particularly Florida continued seeing more past due loans (slide 5). Over the past year, California again saw the largest drop in past due inventory, over 73,000 loans. Florida as well had a drop of almost 9,000 1st lien mortgage loans. Concerning numbers emerge in New York and New Jersey with both seeing increase of more than 19,000 past due loans (slide 6). 2

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7. Serious Delinquencies The first quarter serious delinquencies largely continue along the same trend as what we have seen in the last year. Florida and Nevada continue to have elevated levels of serious delinquencies, followed by Illinois and New Jersey (slide 8). After an extended period of bloated inventory of serious delinquencies, that inventory generally decreased as the loans moved into the foreclosure status or were cured through modifications or short sales. Still, New Jersey, Vermont, Connecticut and to a lesser degree New York and Oregon, had some slight increases from the 4th quarter last year. Most significant drops were seen in Arizona and Nevada with 148 and 140 basis points drop, respectively (slide 9). Over the past year, decreases in serious delinquencies were more pronounced. Arizona and Nevada similarly saw the most improvement with California and Michigan following. Again, New York, New Jersey and Vermont, but also Washington State, did not see any improvement with serious delinquencies (slide 10). 7

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11. Foreclosure Inventory The change in the foreclosure inventory appears less consistent across states than what serious delinquencies showed. Certainly, foreclosure inventory is improving both on quarterly as well as yearly basis for the three states that suffered significantly from the foreclosure crisis, namely Arizona, California and Nevada. Michigan however had the largest decrease in basis points from the quarter before. Twenty out of 52 states examined saw a decreasing inventory over the past quarter, 3 states had no change, while the rest saw a growing foreclosure inventory. New Jersey had the largest increase both from the previous quarter and from a year ago (slide 13). The other states with the most significant growth of the foreclosure inventory over the past year are New York, Illinois, Maine, Vermont, Washington state the two Carolinas, New Mexico, and Louisiana. As anticipated with progression of serious delinquencies into foreclosure status, there were more states with increasing foreclosure inventory over the past year than were states that had drops in the inventory (slide 14). After all said and done, foreclosure inventory in the first quarter still remained highest in Florida with over 14 percent of loans in the foreclosure inventory followed by Nevada where over 9 percent of mortgage inventory was in the foreclosure status. As noted along the way, New Jersey is heating up with almost 8 percent of the 1st lien inventory in foreclosure status (slide 15). 11

12. Foreclosure Inventory - Continued That brings us to the raw number of mortgages in the foreclosure inventory. Keep in mind that the raw number is dependent on the population size of the state as well. Florida’s overwhelming foreclosure inventory adds up to over 466,000 loans. That is more than twice the size of California’s foreclosure inventory which adds up to over 225,000 loans, and is the second largest in the country. Illinois and New York follow, both with over 100,000 loans in the foreclosure inventory (slide 16). Despite the relatively large foreclosure inventories in Florida and California, both have seen drops in numbers over the past year. Still, California had a much significant drop of over 73,000 mortgage loans while Florida had only a decrease of about 9,000 loans. Drops in Arizona and Nevada, Michigan and Georgia were al larger than that seen in Florida (slide 17). 12

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18. Foreclosures Started Possibly the most interesting indicator to examine at the moment is the change in foreclosure starts between the first quarter of 2011 and the quarter before. Across most all states, foreclosure starts declined, with only slight increases in Arkansas, Tennessee, and Montana. The drops are mostly attributable to the robo-signing crisis which resulted in halted foreclosure processes across the country. The most significant drops were in Nevada, Arizona and Florida. A sixty-six basis points drop in Nevada translates in about 3,460 fewer new foreclosure starts. In Arizona, a 48 basis drop means 5,300 fewer starts, while a 37 points drop in Florida means 11,831 fewer foreclosure starts (slide 19). The annual change in foreclosure starts paints a slightly different picture. This is also the result of moving of delinquent inventory through the foreclosure process pipeline. Unfortunately for Florida which is in a great need of clearing the delinquent inventory, there are again much fewer foreclosure starts than the year before, similarly in Nevada. The foreclosure starts picked up in one-third of states with the most activity seen in Rhode Island where there are about 460 more starts (slide 20). Again, after considering the changes in foreclosure starts, the percent of foreclosure starts is still highest in Nevada, Florida, and Arizona (slide 21). 18

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22. New Delinquencies An indication of what is ahead of us after the existing foreclosure and seriously delinquent inventory clears are new delinquencies, or loans with one missed payment. The good news is that over the least two quarters new delinquencies are down in all states ranging from 83 basis points drop in Indiana to 10 points drop in Wyoming (slide 23). In the first quarter, new delinquencies were highest in Mississippi taking 5.3 percent of the loan inventory. Three other states in the South followed, Louisiana, Alabama, and Georgia, all with about 4.3 percent of loans with one missed payment (slide 24). Several other states in the South have generally seen worsening conditions with rise in new delinquencies ranging between 11 and 21 basis points from the same time last year. Wyoming and Vermont joined the group as well. Fortunately, those states where foreclosure problems persisted over some time now, Arizona, Florida and Nevada, all saw significant decrease in new problem loans (slide 25). 22

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