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OCC: Mortgage performance improves, foreclosures decline

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OCC: Mortgage performance improves, foreclosures decline

Approximately94.1% of first-lien mortgages serviced by eight national banks were current andperforming at the end of the fourth quarter of 2015, in comparison to the 93.9%a quarter earlier, according to the OCC's fourth-quarter 2015 mortgage metricsreport released March 30.

Servicersinitiated 63,387 new foreclosures during the fourth quarter of 2015, areduction of 1.2% from the previous quarter and a drop of 15.9% compared to thefourth quarter of 2014. Home forfeitures — completed foreclosure sales, shortsales and deed-in-lieu-of foreclosure actions — were down 23.4% from a yearearlier.

Servicerscompleted 35,118 mortgage modifications in the fourth quarter of 2015, comparedwith 47,561 mortgage modifications in the same quarter of 2014. Of thefourth-quarter 2015 modifications, 92% were modifications that includedmultiple actions affecting affordability and sustainability of the loan, and30,438, or 87% reduced the loan's pre-modification monthly payment.

Of the32,302 "combination modifications" completed during the quarter, 93%included capitalization of delinquent interest and fees, 86% included a termextension, 81% included an interest rate reduction or freeze, 9% had principalreduced, and 11% had principal deferred. An additional 2,638 loan modificationsdrew only a single action.

Among themodifications completed in the second quarter of 2015, servicers reported 8,151were 60 or more days past due or in the process of foreclosure at the end ofthe month six months afterward.

Themortgages included in the report comprise 41% of all mortgages outstanding theU.S., or approximately 21.5 million loans totaling $3.7 trillion in principalbalances.