First-lien mortgage performance remained steady during the third quarter of 2017 compared to the previous year, according to a quarterly mortgage report published by the Office of the Comptroller of the Currency (OCC).
The OCC Mortgage Metrics Report, Third Quarter 2017, indicated that 94.8 percent of mortgages included in the report were current and performing at the end of the quarter.
“As of Sept. 30, 2017, the reporting banks serviced approximately 18.4 million first-lien mortgage loans with $3.32 trillion in unpaid principal balances,” the report states. “This $3.32 trillion was 33 percent of all residential mortgage debt outstanding in the United States.”
Foreclosure activity decreased 4.7 percent from the previous quarter and 28.5 percent from a year earlier, based on data provided by servicers who reported initiating 34,266 new foreclosures on delinquent mortgages during the third quarter of 2017.
“Loan delinquencies are reported using the Mortgage Bankers Association convention that a loan is past due when a scheduled payment has not been made by the due date of the following scheduled payment,” the report states.
Servicers implemented 25,799 mortgage modifications in the third quarter of 2017, a 31.4 percent decrease from the previous year. Approximately 78 percent of those modifications reduced borrowers’ monthly payments. About 89.8 percent (23,174) of the total loan modifications reported were “combination modifications” — modifications that entailed multiple actions affecting a loan’s affordability and sustainability, such as an interest rate reduction or a term extension. The remaining modifications received a single action and 88 modifications were not assigned a modification type.
Among combination modifications completed in the third quarter, 95.2 percent included capitalization of delinquent interest and fees, 62.6 percent included an interest rate reduction or freeze, 91.1 percent included a term extension, 3.6 percent included principal reduction and 9.8 percent included principal deferral. Among all 25,799 modifications completed during the quarter, 20,146 (78.1 percent) reduced the loan’s pre-modification monthly payment.