New data on Citi's consumer lending activities reveal that loss mitigation successes outnumber foreclosures completed by more than 15 to one – nearly four times the rate it reported in the third quarter of 2008.
In the current quarter, Citi, whose servicing and lending portfolio totals about $751 billion, says it helped approximately 130,000 distressed homeowners avoid foreclosure on mortgages valued at more than $20 billion.
Total loss mitigation actions for borrowers serviced by Citi rose 82% from the second quarter of 2009 and 85% from the same period in 2008. Modifications, excluding Home Affordable Modification Program (HAMP) mods, decreased about 16% from the second quarter. The drop-off is largely due to Citi's implementation of HAMP, which requires a 90-day trial modification period before a modification can be finalized.
Overall, foreclosures and delinquencies continued to trend upward. Citi's 90+ day bucket grew in the third quarter to 5.8%. The foreclosures-in-process inventory increased about 6% from the second quarter, and foreclosures initiated grew 10% over the same period. Foreclosures completed decreased by less than 1% from the second quarter of 2009 to the third quarter of 2009, and decreased by approximately 48% from the third quarter of 2008 to the third quarter of 2009.
Citi's redefault rates on mortgages modified between the second quarter of 2008 and the second quarter of 2009 did not exceed 39%, but the company notes "some deterioration" in the second-quarter 2009 vintage.
"This recent vintage contains a higher proportion of government insured loans, which tend to have a poorer performance record than other types of loans," Citi's report states. "It is important to note that [HAMP] loan performance is not yet reflected in these numbers, as the third quarter of 2009 is the first quarter in which we have made such modifications."