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Performance of U.S. mortgages mostly unchanged in 3Q

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A new report from the Office of the Comptroller of Currency (OCC) shows 88.6% of mortgages were current and performing at the end of the third quarter, down slightly from 88.7% in the previous quarter, but up from 88% a year ago. 

The numbers generally show mortgages holding their own in terms of payment performance.

In the third quarter, servicers launched 382,899 loss mitigation actions to save homes, while simultaneously starting 252,604 new foreclosures, according to OCC data.

The OCC noted the percentage of mortgages 30 to 59 days past due rose 10.4% from the previous quarter to 3.1%, a 3.6% increase from last year.

Seriously delinquent mortgages, or those 60 or more days past due, remained at 4.4%, unchanged from the second quarter, but down 10.8% from a year ago.

"Several factors contribute to the year-over-year improvement, including strengthening economic conditions, servicing transfers, and the ongoing effects of both home retention loan modification programs and home forfeiture actions," the OCC said.

OCC studied loan modifications for the third quarter and found on average modifications implemented reduced borrowers' monthly principal and payments by 23.8% or $345. Those modifications made through the Home Affordable Modification Program ended up reducing payments by 35% on average, or $565.

Modifications that involved payment reductions of 10% or more generally performed better than those that ended up reducing payments less.

The OCC's report is from data collected on 29.8 million first-lien mortgages that carry an outstanding loan balance of $5.1 trillion.

 

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