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OCC: Seriously delinquent mortgages up for first time since 2009

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The percentage of seriously delinquent mortgages serviced by the largest banks and thrifts in the second quarter increased for the first time since the end of 2009, according to the Office of the Comptroller of the Currency. The regulator monitored 32.7 million loans with nearly $5.7 trillion of principal balances. Of those mortgages, 4.9%, or nearly 1.6 million, are more than 60-days delinquent or at least one month past due while in bankruptcy. That's up from 4.8% from the previous quarter and down from 6.1% a year earlier. The peak occurred in the fourth quarter of 2009, when 7.1% of all mortgages were reported seriously delinquent. The OCC said 1.3 million mortgages were in some stage of the foreclosure process in the second quarter, up 12.3% from last year. The data are yet another sign the largest servicers are restarting the foreclosure process after putting a freeze to correct faulty affidavits. According to the OCC, servicers completed 121,202 foreclosures in the second quarter, up 1.2% from the previous period. Completed foreclosure prevention efforts such as modifications and short sales were two-and-a-half times larger. Nearly every delinquency bucket showed an increase from the previous quarter with the largest growth in the 60- to-90-day segment, which rose 9.2%. "The increase in early-stage delinquencies reflects seasonal effects as well as a sluggish economy and elevated unemployment," the OCC said in the report. Meanwhile, the percentage of serviced mortgages current and performing dropped for the first time since the end of last year. Roughly 88% of the mortgages were current, down 60 basis points from the previous month. Comparatively, 93.1% of all mortgages guaranteed by the government-sponsored enterprises were current and performing. Some 5.5 million mortgages are between 30-days delinquent or in the foreclosure process. "The large inventory of seriously delinquent mortgages and foreclosures in process continued to work its way through the collections and loss mitigation process—either through home retention actions such as modifications, or through foreclosures and short sales when home retention alternatives were not possible," the OCC said. Write to Jon Prior. Follow him on Twitter @JonAPrior.

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