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News Release 2011-124
September 29, 2011
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WASHINGTON—The performance of first-lien mortgages serviced by large national banks and federal savings associations declined slightly during the second quarter of 2011, according to a report released today by the Office of the Comptroller of the Currency (OCC).
The quarterly OCC Mortgage Metrics Report showed that 88 percent of the 32.7 million loans in the portfolio were current and performing at the end of the second quarter, down from 88.6 percent at the end of the first quarter, but up from 87.3 percent a year earlier. The decline in portfolio quality is mainly attributable to an increase in early stage delinquencies—mortgages 30-to-59 days delinquent—which increased 0.4 percent from the previous quarter to represent 3 percent of the servicing portfolio. The increase in early stage delinquencies reflects seasonal effects as well as a sluggish economy and elevated unemployment. The percentage of mortgages that were seriously delinquent, as well as mortgages that were 60 or more days delinquent and delinquent mortgages to bankrupt borrowers, increased slightly to 4.9 percent of the portfolio from 4.8 percent in the first quarter of 2011, after decreasing during each of the previous five quarters. While early stage delinquencies and serious delinquencies both increased from the previous quarter, they decreased from a year earlier.
The percentage of mortgages that were in the process of foreclosure remained steady at 4 percent of the mortgages serviced by the reporting banks and savings associations. Although completed foreclosures decreased by more than 30 percent from a year earlier and increased only 1.2 percent from the previous quarter, completed foreclosures may continue to increase in future quarters as a large number of foreclosures work through the process and alternatives to foreclosure are exhausted.
Mortgage servicers continued to seek alternatives to foreclosure for delinquent borrowers in the second quarter, implementing 456,397 home retention actions compared with 287,145 new foreclosure proceedings. Although modifications under the Home Affordable Modification Program increased by 31.6 percent during the quarter, other home retention actions declined, causing an overall decrease of 18.1 percent in new modification actions from the previous quarter.
Other key findings of the report included:
The report covers about 63 percent of all first-lien mortgages in the United States, worth $5.7 trillion in outstanding balances. The complete report can be downloaded from the OCC website, www.occ.gov.
Bryan Hubbard (202) 874-5770