OCC: Mortgage Performance Continued To Improve In Q1

Improved economic conditions combined with foreclosure prevention efforts resulted in improved mortgage performance during the first quarter, according to the Office of the Comptroller of the Currency (OCC).

About 94.2% of all first-lien mortgages serviced by the eight major banks tracked were performing as of the first quarter, a significant improvement compared to the first quarter of 2014 when about 93.1% were performing, according to the OCC's quarterly report on mortgage performance.

The report shows that about 1.9% of the loans serviced by the eight banks were 30 to 59 days past due, a decrease of about 7.0% compared to a year earlier. About 2.6% of the portfolio was seriously delinquent (60 or more days past due or held by bankrupt borrowers whose payments are 30 days or more past due). That's a decrease of about 16.4% compared to the first quarter of 2014.

About 299,424 mortgages, or about 1.3%, were in some stage of the foreclosure process as of the end of the first quarter – a decrease of 30.8% from a year earlier.

The eight servicers initiated 83,058 new foreclosures during the quarter, a decrease of 8.6% from a year earlier. The number of completed foreclosures decreased 31.5% to 38,509.

About 188,816 home retention actions – including modifications, trial period plans and shorter term payment plans – were initiated by the eight servicers during the quarter. About 47,430 home forfeiture actions, including completed foreclosures, short sales and deeds-in-lieu were completed – a decrease of about 20.6% compared to the first quarter of 2014.

About 89.2% of the modifications granted reduced monthly principal and interest payments.

About 55.6% of modifications reduced payments by 20% or more. Modifications reduced payments by $271 per month on average.

Of the approximately 3.7 million modifications completed by the servicers from Jan. 1 2008 through Dec. 31, 2014, about 53% were active at the end of the first quarter, while 47% had exited the portfolio through payment in full, involuntary liquidation, or transfer to a non-reporting servicer.

Of the approximately 2 million active modifications at the end of the first quarter, 72.2% were current and performing, 22.4% were delinquent, and 5.5% were in the process of foreclosure.

The mortgages serviced by the eight banks represent about 43.9% of all residential mortgages outstanding in the U.S. – 22.7 million loans totaling $3.8 trillion in principal balances.

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