Modifications, Delinquencies Climb in 2Q

Loan modifications by banks and thrifts rose substantially in the second quarter, but delinquency and default rates also increased, according to data compiled by the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Combining their data for the first time, the OCC and the OTS said new loan modifications by banks and thrifts increased by 56% from the first to the second quarter of this year. Repayment plans on home loans serviced by banks and thrifts also increased, but by just 8%. All told, banks and thrifts servicing nearly 35 million home loans engaged in some form of loss mitigation on 208,250 mortgage loans in the first quarter and 252,508 loans in the second quarter. Of the total, 92.6% of the loans were performing, down from 93.4% in the first quarter. The share of loans in foreclosure rose from 1.4% in the first quarter to 1.6% in the second.