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Mortgage Performance Improves in Q4 2013

The Office of the Comptroller of the Currency (OCC) released a new report Thursday, highlighting the performance of first-lien mortgages serviced by large national and federal banks continued to improve in the fourth quarter of 2013.

The OCC Mortgage Metrics Report for the Fourth Quarter of 2013 found 91.8 percent of mortgages were currently performing, up slightly from 91.4 percent in Q3 2013. Mortgage performance also increased year-over-year, up from 89.4 percent in Q4 2012.

The OCC's data looks at "about 49 percent of all mortgages outstanding in the United States—24.9 million loans totaling $4.2 trillion in principal balances," the report said.

Both early stage delinquencies and seriously delinquent mortgages numbers fell in Q4.

Early stage delinquencies, defined as mortgages 30-59 days past due, were 2.6 percent, according to the OCC report. Early stage delinquencies were down 8.7 percent from a year ago, the lowest they've been since January, 2008.

Seriously delinquent mortgages, which are mortgages 60 or more days past due, decreased to 3.5 percent, down slightly from the previous quarter's figure of 3.6 percent. Year-over-year, seriously delinquent mortgages fell from 4.4 percent, a decrease of 20.7 percent.

Foreclosure numbers also suggested improvements in the housing market.

Loans in the process of foreclosure decreased by 45.9 percent to 523,528, according to the OCC. New foreclosures during Q4 of 2013 were approximately 124,000, representing a 20.6 percent decrease from a year earlier. Completed foreclosures decreased by 42.6 percent.

The OCC said, "Factors contributing to the reduction in foreclosure activity include improved economic conditions, foreclosure prevention assistance, and transfer of loans."

The OCC found that home retention actions (modifications, trial-period plans, and shorter-term payment plans) were largely successful. Servicers implemented 242,828 actions in the fourth quarter of 2013, compared to 84,031 home forfeiture actions.

Retention actions decreased by 22.4 percent from the previous quarter, and fell 34 percent from the previous year. The OCC found that 91 percent of modifications reduced monthly principal and interest payments by an average of $344 per month.

64.6 percent reduced payments by 20 percent or more.

The report commented, "Servicers have modified 3,388,010 mortgages from the beginning of 2008 through the end of the third quarter of 2013. At the end of the fourth quarter of 2013, 43.4 percent of these modifications were current or paid off."

Additionally, "Another 5.9 percent were 30 to 59 days delinquent, and 10.7 percent were seriously delinquent. Another 4.3 percent were in the process of foreclosure, and 8.0 percent had completed the foreclosure process," the OCC said.

About Author: Colin Robins

Colin Robins is the online editor for DSNews.com. He holds a Bachelor of Arts from Texas A&M University and a Master of Arts from the University of Texas, Dallas. Additionally, he contributes to the MReport, DS News' sister site.

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