Percentage of Current Mortgages Reaches 3-Year High: OCC

The rate of delinquent mortgages fell to a three-year low in first-quarter 2012, according to a report from the Office of the ""Comptroller of the Currency"":http://www.occ.gov/publications/publications-by-type/other-publications-reports/mortgage-metrics-2012/mortgage-metrics-q1-2012.pdf (OCC).

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The _OCC Mortgage Metrics Report for the First Quarter of 2012_ showed that percentages of mortgages between 30-59 days delinquent and mortgages between 60-89 days delinquent both fell to their lowest levels since the OCC began publishing mortgage performance reports in Q1 2008.

The percentage of mortgages that were current and performing increased to 88.9 percent, the highest level seen in three years. The percentage of mortgages 30-59 days delinquent decreased by 17.3 percent from Q4 2011 and 3.8 from Q1 2011. The percentage of mortgages that were seriously delinquent was 4.5 percent, down 10.4 percent from the previous quarter and 6.2 percent year-over-year.

The percentage of mortgages in the process of foreclosure at the end of the first quarter increased by 1.8 percent from the previous quarter and 2.3 percent year-over-year. However, the number of newly-initiated foreclosures decreased from the previous quarter by 1.8 percent and from the same period in 2011 by 8.1 percent. The report also showed that the while the number of foreclosures in process increased slightly (0.6 percent) from the previous quarter, it decreased 3 percent from the same time in 2011.

The report attributed the improved performance to several factors, including strengthening economic conditions during the quarter, seasonal effects, servicing transfers, and the ongoing effects of home retention programs and home forfeiture actions.

Servicers implemented 352,989 new home retention actions-modifications, trial-period plans, and payment plans-during the quarter, nearly twice the number of completed foreclosures but still a 23.3 percent decrease from the previous quarter and a 36.7 percent decrease year-over-year. While servicers have been emphasizing alternative solutions to foreclosure, retention actions have fallen with delinquency rates as servicers run out of options to help homeowners who have not already received assistance.

Of the more than 2.5 million loans modified by servicers from 2008-2011, 50.7 percent were either current or had been paid off by the end of 2012's first quarter. Another 7.1 percent of modified loans were 30-59 days delinquent, while 15.1 percent were seriously delinquent. Nearly 11 percent were in the foreclosure process, and 6.3 percent had completed the process of foreclosure. Modifications made more recently that focused on reduced payments and increased affordability outperformed earlier loans.

HAMP-modified loans also outperformed others-68.2 percent of HAMP modifications implement since Q3 2009 remained current compared to 53.4 percent of other modifications made during the same period. The better performance reflects HAMP's emphasis on reduced payments, income verification, and affordability, traits that nearly all performing loans had in common.

Mortgages serviced for Fannie Mae and Freddie Mac made up 59 percent of mortgages in reporting servicers' portfolios. The performance of these mortgages remained relatively consistent over the last year, with the percentage of current and performing mortgages at the end of the quarter at 93.7 (a slight increase from 93.2 percent at the same time last year). The portfolio of GSE mortgages tends to perform better because it contains prime loans.