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.