This OCC and OTS Mortgage Metrics Report for the first quarter of 2010 provides performance data on first-lien residential mortgages serviced by national banks and federally regulated thrifts. The mortgages in this portfolio comprise more than 64 percent of all mortgages outstanding in the United States—nearly 34 million loans totaling almost $6 trillion in principal balances. The report provides information on their performance through March 31, 2010.
Key Findings from this Report
- Delinquency rates dropped in the first quarter of 2010, with improvement in all categories of mortgages—prime, Alt-A, and subprime. The percentage of mortgages that were current and performing increased for the first time since the agencies began publishing this report in June 2008. Mortgages in all stages of pre-foreclosure delinquency improved during the first quarter, with the percentage of mortgages that were 30–59 days delinquent, 60–89 days delinquent, and 90 or more days delinquent all declining. The improvement occurred across all risk categories—prime, Alt-A, and subprime mortgages. Serious delinquencies declined in all risk categories from the previous quarter, but remained up from a year ago.
- But the number of foreclosures increased substantially, including new foreclosures, foreclosures in process, and completed foreclosures. Compared to the previous quarter, newly initiated foreclosures increased 18.6 percent to 370,536; foreclosures in process increased 8.5 percent to 1,170,874; and completed foreclosures increased 18.5 percent to 152,654. The increase in foreclosures was mentioned in prior reports, as servicers exhaust options to assist holders of a large number of seriously delinquent mortgages and the large number of existing foreclosures in process work through the system.
- At the same time, the number of modifications and other home retention actions also increased. Overall, the number of actions to prevent avoidable foreclosures increased 5.4 percent from the previous quarter and 61.4 percent from a year ago. The 629,678 new home retention actions in the first quarter included 99,980 modifications and 187,932 trial period plans made under the “Home Affordable Modification Program” (HAMP), and 129,348 modifications and 92,985 trial plans under other programs. The sustainability of modifications also continued to improve with more than 87 percent of loan modifications reducing payments, and nearly 55 percent reducing payments by 20 percent or more.
- Re-default rates for modified mortgages remain high. At 12 months following modification, more than half of all modified mortgages were 60 or more days past due.
- However, recent vintages performed better. New analysis included in the report shows that of the 587,097 modifications done in 2009, nearly 52 percent were current at the end of the first quarter of 2010 compared with 27 percent of the modifications implemented during 2008. While delinquency rates predictably increase over time, data suggest more recent vintages of modifications may perform better over time. As shown before, modifications that reduce the borrower’s monthly principal and interest payments consistently perform better than modifications with the payment unchanged or increased.
Full report below..