OCC Reports Improvement in Q1 Mortgage Performance

In its Mortgage Metrics Report for the First Quarter of 2023—providing information on mortgage performance through March 31, 2023—the Office of the Comptroller of the Currency (OCC) reported an improvement in the performance of first-lien mortgages in the federal banking system compared to the previous quarter.

As of March 31, 2023, the reporting banks serviced approximately 12 million first-lien residential mortgage loans with $2.7 trillion in unpaid principal balances. This $2.7 trillion represented 22% of all residential mortgage debt outstanding in the United States.

Overall mortgage performance this quarter improved from the first quarter of 2022. The percentage of mortgages that were current and performing at the end of the Q1 of 2023 was 97.6% compared with 96.9% at the end of Q1 of 2022.

The CARES Act, signed into law on March 27, 2020, and extended on February 18, 2022, allows for loan forbearance that can extend up to 360 days and is reflected in the mortgage performance data.

The percentage of seriously delinquent mortgages–mortgages that are 60 or more days past due and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due–was 1.1% in the Q1 of 2023, compared to 1.3% in the previous quarter, and compared to 1.8% year-over-year.

Nationwide, mortgage servicers initiated 11,459 new foreclosures Q1 of 2023, an increase over Q4 of 2022, but a lower volume than a year earlier. The new foreclosure volume in Q1 of 2023 was reportedly lower than pre-COVID-19 pandemic foreclosure volumes.

Mortgage servicers completed 10,375 modifications during Q1 of 2023, a 9.1% decrease from the previous quarter’s 11,419 modifications. Of the 10,375 modifications completed during Q1, 5,842 or 56.3%, reduced the loan’s pre-modification monthly payment, 8,580 or 82.7%, were “combination modifications”—modifications that included multiple actions affecting the affordability and sustainability of the loan, such as an interest rate reduction and a term extension.

The OCC collects data on first-lien residential mortgage loans serviced by seven national banks with large mortgage-servicing portfolios. The Report is published quarterly to promote a broader understanding of mortgage portfolio performance and modification activity in the federal banking system, support the supervision of regulated institutions, and fulfill Section 104 of the Helping Families Save Their Homes Act of 2009, as amended by Section 1493(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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 & Urban Development (HUD), Federal Housing Finance Agency (FHFA), and the respective government agencies and government-sponsored enterprises (GSEs) for the calculation and reporting of delinquency and credit bureau reporting.

Click here for more information or to view the OCC's Mortgage Metrics Report for the First Quarter of 2023.