First-lien, residential mortgage loans performed about the same in the first quarter of this year as they did in the fourth quarter of 2016, but showed slight improvement over their performance in the same period of 2015, according to the Office of the Comptroller of the Currency’s (OCC) most recent Mortgage Metrics Report.
At the end of Q1, 94.9 percent of mortgages were current and performing, a slight uptick from Q4 2015’s 94.1 percent and Q1 2015’s 94.2 percent, the OCC said.
As of March 31, the reporting banks serviced approximately 21.1 million first-lien mortgage loans with $3.62 trillion in unpaid principal balances, or 38 percent of all outstanding, first-lien, residential mortgage debt in the country. Those figures are modest changes from Q4 2015, when the reporting banks serviced about 21.4 million loans with nearly $3.68 trillion in unpaid principal balances. In Q1 2015, banks reported 22.66 million loans with $3.82 trillion in unpaid principal balances.
The first quarter saw 58,900 new foreclosure actions initiated, down slightly from 63,400 new foreclosure actions initiated in the fourth quarter of 2015, but down quite a bit from the 83,100 new foreclosure actions reported in the first quarter of last year.
Completed foreclosures were relatively unchanged from quarter to quarter, with 30,200 foreclosure and other home forfeiture actions completed in Q1, compared with Q4 2015’s 29,300 completed foreclosures. The same period last year saw 38,500 completed foreclosures.
Servicers completed 34,481 modifications during the first quarter, 91 percent of which were “combination modifications” that included multiple actions affecting affordability and sustainability of the loan, such as an interest rate reduction and a term extension. An additional 2,681 loan modifications received only a single action.
California reported the highest number of total modifications with 2,933 actions implemented. North Dakota had the lowest total with only seven actions implemented.
Of the 31,450 combination modifications completed during Q1, 93 percent included capitalization of delinquent interest and fees, 81 percent included an interest rate reduction or freeze, 88 percent included a term extension, 8 percent had principal reduced and 13 percent had principal deferred.
Among the 34,481 modifications completed, 30,028, or 87 percent, reduced the loan’s pre-modification monthly payment. Among modifications that were completed during Q3 2015 — the first quarter for which all loans modified during the quarter could have aged at least six months — servicers reported that 6,058 were 60 or more days past due or in the process of foreclosure at the end of the month that they became six months old.
The OCC’s Mortgage Metrics Report is published quarterly to promote broader understanding of mortgage portfolio performance in the federal banking system, support supervision of regulated institutions and fulfill section 104 of the Helping Families Save Their Homes Act of 2009. The OCC compiles the report based on data it collects on the volume of mortgage modifications completed on first-lien residential mortgage loans serviced by seven national banks with large mortgage-servicing portfolios: Bank of America, Citibank, HSBC, JPMorgan Chase, PNC, U.S. Bank and Wells Fargo. This quarter’s report reflects a change in the number of institutions included in the Mortgage Metrics data collection, with CIT Bank/OneWest no longer participating.
The report uses reporting elements that are considered standard for the residential mortgage industry, but the OCC notes that the loans included may differ from the overall population because they are not a statistically representative, random sample. 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. Results are not seasonally adjusted.