Mortgage servicers complete more foreclosures in 1Q
Mortgage servicers completed nearly 123,000 foreclosures in the first quarter, the most since the middle of 2010, according to the Office of the Comptroller of the Currency.
The data covers only 60% of all first-lien mortgages in the U.S. But the report released Wednesday showed a gradually restarting foreclosure process that servicers froze in October 2010 to correct mishandled documentation and wide-scale abuses.
Consent orders signed last spring and a $25 billion settlement with state attorneys general reached this year provided new standards for servicers.
The total completed foreclosures increased 5.9% from the previous three months and 2.7% from one year ago. Totals are still off the nearly 174,000 foreclosures completed in the three months leading up to the freeze in 2010.
Servicers reporting to the OCC reduced the amount of foreclosures in the process to 1.27 million as of March 31, down 3% from the year before. The backlog did increase 0.6% from the previous three months, according to the data.
Newly initiated foreclosures dropped 8% from one year ago to roughly 287,000 filings.
Servicers conducted fewer home retention actions, such as modifications, compared to home forfeitures such as repossessions and short sales.
Modifications came in at slightly more than 102,000 in the first quarter, a 12% drop from the previous three months and down 36% from a year ago.
The amount of modifications declined every quarter since the second quarter of 2010 when workouts peaked at nearly 267,000, according to the OCC.
Bruce Kreuger, the senior mortgage examiner at the OCC, said in a conference call with reporters the decrease is a result of fewer borrowers becoming severely delinquent and eligible for different modificaiton programs.
"It's a limited number borrowers," Kreuger said. "We will see that number continue to decrease."
Roughly half of the modifications completed between 2008 and the end of 2011 were still current or paid off as of March 31.
Nearly 89% of the 31 million home loans reported to the OCC were still current in the first quarter, up nearly a full percentage point from the previous three months and the highest level since the first quarter of 2009.