January 12, 2012 (Jeff Alan)
New foreclosures increased by 21.1 percent in the third quarter of 2011 according to the Office of the Comptroller of the Currency (OCC) as a result of mortgage servicers lifting voluntary moratoria implemented in late 2010 caused by the “robo-signing” controversy.
A total of 1,327,077 loans in the OCC’s portfolio were in foreclosure at the end of the third quarter, representing 4.1 percent of the overall portfolio, up from 4.0 percent in the second quarter.
Of the 32.4 million loans in the OCC’s portfolio, 88.0 percent were current and performing at the end of the quarter. Mortgages that were 30-59 days delinquent remained unchanged from the previous quarter at 3.0 percent, while mortgages that were 60 days or more past due and delinquent loans to bankrupt borrowers held steady at 4.9 percent.
Although the overall level of delinquencies in first-lien mortgages held by the large national banks and federal savings associations under OCC’s supervision remains elevated, the delinquency rates remained stable during the third quarter and were still lower than in the same quarter in 2010.
Mortgage servicers implemented 458,899 home retention actions in the third quarter, up 0.6 percent from the second quarter, but down 2.4 percent from a year ago.
Completed loan modifications fell 8.5 percent from the previous quarter to 137,539. Loan modifications completed through the federal government’s Home Affordable Modification Program (HAMP) fell 23.0 percent to 53,941.
Payment modifications through the government’s Home Affordable Modification Program (HAMP) continued to provide larger relief as the average principal and interest reduction under a HAMP modification was $567 compared to $382 for all modifications.
From the beginning of the government’s loan modifications efforts in 2008 through the end of the second quarter of 2011, mortgage servicers have modified 2,258,026 mortgages. Unfortunately, by the end of the third quarter, only 50.8 percent of those modifications have remained current or been paid off. Of the remaining modifications, 8.8 percent were 30 to 59 days delinquent, 17.8 percent were 60 days or more delinquent, 11 percent were in the process of foreclosure, and 5.8 percent had completed the foreclosure process
Loans that were modified by 10 percent or more performed better than those that were modified less than 10 percent. Of the loans that were modified which resulted in a payment reduction of over 10 percent, 58.8 percent were current and performing.
Of the loans that were modified which resulted in the payment being reduced by less than 10 percent, only 36.4 percent remained current and performing.
OCC’s quarterly report covers about 62 percent of all first-lien mortgages in the United States, worth $5.6 trillion in outstanding balances.
Tags: OCC, mortgage loan performance, delinquent mortgages, mortgage servicers, foreclosures, loan modifications, HAMP