Banks serviced approximately 16.9 million first-lien mortgages by the end of December 2018, according to the Q4 Mortgage Portfolio and Performance report published by the Office of the Comptroller of Currency (OCC).
The $3.22 trillion in unpaid balances serviced by the banks during the last quarter, the OCC reported, made up 31 percent of all outstanding mortgage debt in the United States. The report indicated that the overall mortgage performance across the country improved on an annual basis, with the percentage of mortgages that were current and performing at the end of the fourth quarter of 2018 at 95.8 percent compared with 94.5 percent the previous year.
While the fourth quarter saw an uptick in foreclosures, with servicers initiating 29,515 new foreclosures marking a 3.5 percent increase over the previous quarter. However, new foreclosures declined 14.5 percent from a year earlier. Home forfeiture actions during the quarter—completed foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions—also decreased 20.9 percent from a year earlier to 14,520.
The report indicated a 21.2 percent decrease in loan modifications over the previous year with servicers completing 20,256 loan mods during the quarter. Of these, 17,487, or 86 percent, "were combination modifications—modifications that included multiple actions affecting affordability and sustainability of the loan, such as an interest rate reduction and a term extension. Of the remaining "2,636 loan modifications received a single action and 133 modifications were not assigned a modification type.
Breaking down the combined modifications, the report indicated that 97.2 percent of these mods included capitalization of delinquent interest and fees, 38.3 percent included an interest rate reduction or freeze, 96.3 percent included a term extension, 1.2 percent included principal reduction, and 13.9 percent included principal deferral.
The OCC said that the second quarter of 2018 is the first quarter for which all loans modified during that quarter could have aged at least six months by December 31, 2018. As a result, of the 32,655 modifications that were completed during the second quarter of 2018, "servicers reported that 4,169, or 12.76 percent, were 60 or more days past due or in the process of foreclosure at the end of the month that they became six months old."
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