OCC: More Loan Mods, Fewer Foreclosures in First Quarter

Mortgages serviced by large national and federal savings banks supervised by the Office of the Comptroller of the Currency performed better in the first quarter than a year earlier.

The OCC Mortgage Metrics Report released Thursday showed 90.2% of mortgages were current and performing at the end of the first quarter, compared to 89.4% the prior quarter and 88.9% a year ago.

The percentage of early-stage delinquencies for mortgages that were 30-59 days past due was 2.6%, down 9.3% quarter-over-quarter, but up 3.0% from the same time period last year.

Meanwhile, seriously delinquent mortgages—60 or more days late in payment or held by bankrupt borrowers whose payments are at least 30 days past due—fell 4% in 1Q13. Furthermore, the percentage of mortgages that were seriously delinquent has fallen 10.4% on a year-over-year basis.

Kathy Gouldie, credit lead expert at OCC, cited the strengthening economic conditions, servicing transfers, home retention efforts and home forfeiture actions for the improvement in home mortgage performance through March 31, 2013.

During the first quarter, servicers helped 348,733 homeowners avoid foreclosure by completing 138,546 loan modifications, 102,912 trial-period plans and 107,275 shorter-term payment plans. Servicers reduced monthly principal and interest payments in 93.7% of modifications made in the quarter.

On average, borrowers who qualified for modifications saw their monthly payments drop by 25.2%, or $361, while the average HAMP modification payments were reduced by 34.9% ($547).

Meanwhile, only 131,704 home forfeiture actions which include completed foreclosures, short sales and deed-in-lieu-of-foreclosure actions were completed from the beginning of January through the end of March. This figure is down both on a quarterly and yearly basis by 22.1% and 29.1%, respectively.

Furthermore, the number of loans in the foreclosure process at the end of 1Q13 decreased by 28.6% from a year ago to 907,231. The OCC said servicers initiated 178,356 new foreclosures during the quarter, a 13.8% increase from the previous quarter but a 37.8% drop from last year. Also, there were only 84,972 completed foreclosures, which is 19.7% less than 4Q12 and 30.9% less than a year ago.

The mortgages in OCC’s portfolio account for 55% of all mortgages outstanding in the U.S., where 27.9 million loans total $4.7 trillion in principal balances.

The nine OCC-regulated servicers are Bank of America, JPMorgan Chase, Citibank, HSBC, MetLife, PNC, U.S. Bank, Wells Fargo and OneWest Bank.