The industry has its eyes peeled for any indication that we’ve turned the corner on the housing crisis, and for good reason – markets around the country have been battered by plummeting property values, mounting foreclosures, and neighborhoods riddled with vacant homes. Any sign of recuperation is a welcome reprieve.

But the experts at Lender Processing Services (LPS) caution that declaring the recovery has taken hold may be premature. And the Florida-based company has the numbers to back it up, based on its extensive market analysis of loan performance trends and a loan-level database of more than 40 million active loans.

During a press briefing at the Mortgage Bankers Association’s (MBA) National Mortgage Servicing Conference and Expo in San Diego Wednesday, Ted Jadlos, president and senior managing director of LPS Applied Analytics, advised market observers to beware of “picture frame” thinking when looking for signs of recovery.

Jadlos laid out a graph on the widescreen depicting monthly stats of noncurrent loans and foreclosures, spanning back to January of 1995. The lines zigzag in

small intervals, with noncurrent never rising above 6 percent and foreclosures never surpassing the 1 percent mark, until June 2007. From there, it’s a rigid and slippery slope up to January 2010 illustrating just how deep of a crisis we’re in, with noncurrent loans nearly hitting the 14 percent stratum and foreclosures dangerously close to 3.5 percent.

The vertical rise has yet to reverse – not even a smidge. Jadlos stressed that the pool of problem loans continues to grow and mutate. By LPS’ tallies, the total noncurrent loan count, including all delinquencies and foreclosures averaged 4.1 million during the months of January to June 2008. That average jumps to 5.6 million when you include all of the last two years, from January 2008 to January 2010. Looking at last month alone, the noncurrent count skyrockets to 7.4 million.

According to Jadlos, loan deterioration is outpacing efforts of the industry and the administration to restructure unaffordable mortgages. He says new problem loans far exceeded modifications from January 1, 2009 through January 31, 2010.

In that 13-month period, LPS’ data shows that 2.45 million mortgages turned from current to delinquent or in foreclosure. During the same timeframe, LPS says about 1.95 million modifications were initiated – 947,000 through the Home Affordable Modification Program (HAMP) and 1 million non-HAMP mods. Jadlos added that last month alone, 2.9 loans deteriorated for every one that improved.

According to LPS’ analysis, total delinquencies and foreclosure inventories are still climbing and continue to set new record highs. In January 2010, the company put the foreclosure rate at 3.27 percent.