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In the third quarter of this year, the overall percentage of mortgages that managed to stay current improved from last year, but declined slightly quarter-over-quarter, according to a ""report"":http://www.occ.gov/publications/publications-by-type/other-publications-reports/mortgage-metrics-2012/mortgage-metrics-q3-2012.pdf from the ""Office of the Comptroller of the Currency"":http://www.occ.gov (OCC).
[IMAGE]The report covered 58 percent of all first-lien mortgages in the country.
The OCC revealed 88.6 percent of mortgages were current and performing by the end of Q3, a slight decrease from 88.7 percent in Q2, and an improvement from 88 percent last year.
The agency explained factors such as strengthening economic conditions, servicing transfers, and the ongoing impact of loan modification programs and home forfeiture actions led to the year-over-year improvement.
The percentage of mortgages past due by 30 to 59 days increased to 3.1 percent, which is 10.4 percent higher than Q2 and a 3.6 percent increase from a year ago.
The percentage of seriously delinquent mortgages fell 10.8 percent from last year, but was unchanged from Q2 at 4.4 percent.
Foreclosure activity, according to the report, ""remains elevated,"" but fewer properties entered the foreclosure process.
[COLUMN_BREAK]In Q3, servicers initiated 252,604 new foreclosures, representing a quarterly and yearly decrease of 16.5 percent 27.4 percent, respectively.
The number of mortgages in the foreclosure process fell to 1,158,289, down 6.4 percent from the previous quarter and 12.6 percent from last year. Completed foreclosures increased to 114,742, up 12.8 percent from Q2 and up 1.3 percent increase from a year ago.
Servicers also continued to stave off foreclosures through solutions such as modifications. In Q3, more home retention actions were applied compared with home forfeiture actions (foreclosure sales, short sales, and deeds-in-lieu), with servicers implementing 382,899 home retention actions compared to 180,309 home forfeiture actions. However, home retention actions were down 8.9 percent from Q2 and 16.6 percent decrease from a year ago, while home forfeiture actions were up 7.7 percent from Q2 and 4 percent from last year.
When loans were modified, OCC found on average, homeowners saw monthly principal and interest payments decrease by 23.8 percent, or $345. Reductions were even greater through the government's Home Affordable Modification Program (HAMP), with borrowers saving 35.3 percent on average, or $565.
From January 1, 2008 through June 30, 2012, servicers have modified 2,741,912 loans, according to the report. A little less than half, or 44.9 percent, of the modified loans were current and performing by the end of Q3. About 16.5 percent of those loans were in foreclosure or completed the foreclosure process, another 22 percent were delinquent, and about 1.8 percent were paid off.
The agency also reported a significant difference in performance when comparing modifications that brought payments down by 10 percent and mods that reduced payments by less.
By the end of Q3, 52.8 percent of loans with payments reduced by 10 percent or more were current and performing, compared with 32.8 percent of mods that saw reduced payments by less than 10 percent.
