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OCC: Mortgage Performance Improves in Q4

A higher share of mortgages were current and performing at the end of the fourth quarter, while the number of new foreclosures hit a record low, the ""Office of the Comptroller of the Currency"":http://www.occ.gov/ (OCC) revealed in its ""_Mortgage Metrics Report_"":http://www.occ.gov/news-issuances/news-releases/2013/nr-occ-2013-56a.pdf.


As of the end of December, 89.4 percent of mortgages were still current and performing, an increase from 88.6 percent in the third quarter and an improvement from 88 percent during the same quarter a year ago.

Servicers also began a fewer number of foreclosures after initiating 156,773 new foreclosures in Q4, the the lowest number since Q1 2008, which is when the OCC began the report.

In addition, the number of loans in the foreclosure process ended the year below the one million mark, a first since the end of June 2009. The fourth quarter figure for loans in foreclosure totaled 967,467, a 16.5 percent quarterly decrease and 23.4 percent yearly decline.

Completed foreclosures were also down and fell to 105,875, a 7.7 percent decrease from the third quarter and an 8.9 percent drop from a year ago.

This OCC's report is based on first-lien mortgages serviced by selected national and federal savings banks. The portfolio includes 29 million loans and represents 57 percent of all mortgages outstanding in the country.


The report also found the number of seriously delinquent loans (60-plus delinquencies) in the portfolio fell by 288,064 in Q4 to 4.4 percent, a quarterly and yearly decrease of 1.1 percent and 11.6 percent, respectively.

The percentage of mortgages that were 30 to 59 days past due stood at 2.9 percent, which represents a decline of 8.2 percent from Q3 and a 6.1 percent decrease from a year ago.

According to the OCC report, a number of factors led to the yearly improvement, such as ""strengthening economic conditions, the ongoing effects of both home retention efforts and home forfeiture actions, and servicing transfers to institutions outside the federal banking system.""

Servicers helped borrowers remain in their homes by implementing more home retention actions (modifications, trial-period plans, etc..) over home forfeiture actions (completed foreclosures, short sales, deeds-in-lieu) helping to keep more borrowers in their home.

By the end of Q4, servicers completed 367,169 home retention actions compared to 169,064 home forfeiture actions.

Servicers slowed the pace at which they implemented home retention actions, which decreased quarterly and yearly by 4.1 percent and 20.2 percent, respectively.

Home forfeiture actions also slowed, decreasing by 6.2 percent from the third quarter and by 7.3 percent from a year ago.

Of the home forfeiture actions, foreclosures numbered 114,742, while 61,761 actions were short sales. Meanwhile, loan modifications accounted for 114,324 of the home retention options.

The OCC also tracked modification performance over the last five quarters and found after three months, between 6.5 percent and 8.1 of modified loans became seriously delinquent. Six months after a modification, 12.5 percent to 14.1 percent of loans were at least 60 days past due, while the range was even greater after 12 months at 21.9 percent to 22.2 percent.

About Author: Esther Cho


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