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OCC: Overall Mortgage Performance Improves in Q3

The Office of the Comptroller of the Currency (OCC) reported that the performance of first-lien mortgages in the federal banking system improved during Q3 of 2022.

The OCC Mortgage Metrics Report, Third Quarter 2022 showed that 97.2% of mortgages included in the report were current and performing at the end of the quarter, compared to 95.6% a year earlier.

This latest report from the OCC presents performance data for the third quarter of 2022 for loans that the reporting banks own or service for others as a fee-based business. The data collected reflects a portion of first-lien residential mortgages in the country. The characteristics of the loans included here may differ from the overall population. The loans included are not a statistically representative, random sample. The report excludes junior liens, home equity lines of credit, and home equity conversion mortgages (reverse mortgages).

For loans in forbearance covered by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, reporting banks are following guidance from the U.S. Department of Housing and Urban Development (HUD), Federal Housing Finance Administration (FHFA), and the respective government agencies and government-sponsored entities for the calculation and reporting of delinquency and credit bureau reporting.

The percentage of seriously delinquent mortgages, defined as mortgages 60 or more days past due and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due, was 1.3% in Q3 of 2022, compared to 1.5% in the prior quarter, and 3.1% year-over-year.

Nationwide, mortgage servicers initiated 9,835 new foreclosures in Q3 of 2022, a decrease from the prior quarter, but a higher volume than a year earlier. The new foreclosure volume in Q3 of 2022 was lower than pre-COVID-19 pandemic foreclosure volumes.

Mortgage servicers completed 16,160 modifications during Q3 of 2022, a 42.5% decrease from the previous quarter. Of the 16,160 modifications completed during Q3, 11,696 (72.4%) reduced the loan's pre-modification monthly payment, and 15,037 (93.1%) were "combination modifications"—modifications that included multiple actions impacting the affordability and sustainability of the loan, such as an interest rate reduction and a term extension.

The first-lien mortgages included in the OCC's Quarterly Report comprise 22% of all residential mortgage debt outstanding in the United States or approximately 12 million loans totaling $2.7 trillion in principal balances.

The OCC’s Mortgage Metrics Report is published quarterly to promote a broader understanding of mortgage portfolio performance and modification activity in the federal banking system, support supervision of regulated institutions, and fulfill Section 104 of the Helping Families Save Their Homes Act of 2009 (codified at 12 USC 1715z-25), as amended by section 1493(a) of the Dodd–Frank Wall Street Reform and Consumer Protection Act.


About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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