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OCC: Mortgage Performance Continued To Improve In Q4

About 93.2% of the mortgages serviced by the eight largest U.S. mortgage servicers were current and performing at the end of the fourth quarter of 2014 - compared with 93.0% at the end of the third quarter of 2014 and 91.8% at the end of the fourth quarter of 2013, according to the Office of the Comptroller of the Currency’s (OCC) quarterly report on mortgage performance.

The report tracks the performance of about 45% of all first-lien residential mortgages outstanding in the U.S. As of the end of the fourth quarter, those approximately 23.1 million loans represented about $3.9 trillion in unpaid principal balance.

About 2.4% of the loans tracked were 30-59 days past due - a decrease of about 9.4% compared to the fourth quarter of 2013.

About 3.1% of the loans were 60-plus days past due or held by bankrupt borrowers whose payments were 30 days or more past due - a decrease of about 12.2% compared to a year earlier.

Foreclosure activity among the reporting servicers also continued to decline. The number of mortgages in the process of foreclosure at the end of the fourth quarter fell to 315,922, a decrease of 39.7% from a year earlier.

The percentage of mortgages that were in the process of foreclosure at the end of the fourth quarter was 1.4%, according to the report.

Servicers initiated 75,395 new foreclosures during the quarter - a decrease of 39.4% compared to the fourth quarter of 2013.

There were about 39,331 completed foreclosures during the fourth quarter, down 35.3% from a year earlier. The OCC notes that improved economic conditions and foreclosure prevention assistance contributed to the decline in foreclosure activity.

Servicers implemented 195,577 home retention actions (e.g., modifications, trial-period plans and shorter-term payment plans) during the quarter compared with 49,749 home forfeiture actions (e.g., foreclosures, short sales and deeds-in-lieu). This means that only one in four foreclosure starts actually ended in foreclosure.

The number of home retention actions implemented by servicers decreased 19.5% from a year earlier.

More than 88% of the modifications processed during the quarter included reduced monthly principal and interest payments. About 52.2% of modifications reduced payments by 20% or more.

 

CoreLogic: Number Of Homes With Negative Equity Rose 3.3% In Q4

About 1.2 million U.S. homes returned to positive equity at the end of the fourth quarter, bringing the total number of homes with positive equity to approximately 44.5 million, or 89% of all homes with a mortgage, according to CoreLogic.

However, the firm finds that about 5.4 million properties, or 10.8% of all properties with a mortgage, were still in negative equity (underwater) as of the fourth quarter. This is an increase of 3.3% compared to the 5.2 million homes, or 10.4% of all homes with a mortgage, that had negative equity in the third quarter. But, it is a decrease of 18.9% compared to the 6.6 million homes, or 13.4% of all homes with a mortgage, that were underwater in the fourth quarter of 2013.

As of the end of the fourth quarter, the national aggregate value of negative equity was about $349 billion. That’s up from about $341.8 billion in the third quarter but down 13.4% from about $403 billion in the fourth quarter of 2013.

Of the 49.9 million residential properties with a mortgage, approximately 10 million, or 20%, had less than 20% equity (under-equitied), and 1.4 million of those had less than 5% equity (near-negative equity).

The big question, of course, revolves around what will happen to home values over the next year: If they fall a little, more homes will be underwater; however, if they rise, fewer homes will be underwater.

The slight increase in the overall number of underwater homes in the fourth quarter compared to the third quarter was primarily due to declining home values in certain markets.

“The share of homeowners that had negative equity increased slightly in the fourth quarter of 2014, reflecting the typical weakness in home values during the final quarter of the year,” explains Frank Nothaft, chief economist for CoreLogic, in a statement. He adds that CoreLogic’s Home Price Index (HPI) “dipped 0.7 percent from September to December, and the percent of owners ‘underwater’ increased to 10.8 percent. However, from December to December, the CoreLogic index was up 4.8 percent, and the negative equity share fell by 2.6 percentage points.”

“Negative equity continued to be a serious issue for the housing market and the U.S. economy at the end of 2014, with 5.4 million homeowners still underwater,” adds Anand Nallathambi, president and CEO of CoreLogic. “We expect the situation to improve over the course of 2015. We project that the HPI will rise five percent in 2015, which will lift about 1 million homeowners out of negative equity.”

States that had the highest percentage of mortgaged properties in negative equity in the fourth quarter were Nevada (24.2%), Florida (23.2%), Arizona (18.7%), Illinois (16.2%) and Rhode Island (15.8%). These top five states combined accounted for 31.7% of negative equity in the U.S.

States that had the highest percentage of mortgaged residential properties in an equity position included Texas (97.4%), Alaska (97.2%), Montana (97.0%), Hawaii (96.3%) and North Dakota (96.2%).

 

Black Knight: Delinquency Rate, Foreclosure Inventory Fall To 2007 Lows

The delinquency rate fell to about 5.36% of all mortgages in February, down 3.7% compared to January and down 10.24% compared to February 2014, reaching the lowest level since August 2007, according to Black Knight Financial Services.

Foreclosure starts fell to about 79,700 for the month - down 15.48% compared to January and down 13.37% compared to February of last year - according to the firm’s “First Look” mortgage report, which analyzes data flowing through Black Knight’s mortgage servicing platform.

What’s more, the foreclosure inventory fell below 800,000 units in February - down about 15,000 compared to January and down about 315,000 compared to February 2014 to reach the lowest level since December 2007.

The total U.S. foreclosure presale inventory rate was about 1.58% of all homes, down about 1.91% compared to January and down 28.98% compared to February 2014.

The prepayment rate jumped an impressive 31.5% compared to January and was up 75%, year over year. About 1.16% of accounts saw prepayments in February.

About 2.7 million properties were 30 or more days past due but not in foreclosure in February - a drop of about 100,000 compared to January and a drop of about 278,000 compared to February 2014.

About 1.1 million properties were 90 or more days past due but not in foreclosure - a drop of about 45,000 compared to January and a drop of about 175,000 compared to February 2014.

States with the highest percentage of delinquent (30-plus days past due) loans were Mississippi (13.49%), New Jersey (11.67%), Louisiana (10.73%), New York (10.18%) and Rhode Island (9.99%).

States with the lowest percentage of delinquent loans included Montana (3.74%), Minnesota (3.70%), South Dakota (3.57%), Colorado (3.49%) and North Dakota (2.41%).

Delinquency and Default

OCC: Mortgage Performance Continued To Improve In Q4

 

 

 

 

 

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