First-lien mortgages serviced by large national and federal savings banks are 93.1% improved in the first quarter of 2014 and foreclosures have been cut in half, according to a report released today by the Office of the Comptroller of the Currency.
Servicers initiated 90,852 new foreclosures during the quarter, a decrease of 49.1% from a year earlier. The number of completed foreclosures also decreased 33.9% to 56,185, compared to a year ago.
Factors contributing to the decline in foreclosure activity include improved economic conditions, foreclosure prevention assistance, and transfer of loans to servicers not included in this report.
The mortgages in this portfolio comprise about 48% of all mortgages outstanding in the United States — 24.5 million loans totaling $4.1 trillion in principal balances.
The improvement in first-lien mortgages contrasts with 91.8% at the end of the previous quarter and 90.2% a year earlier. The percentage of mortgages that were 30 to 59 days past due decreased 19.8% from a year earlier to 2.1% of the portfolio, the lowest level since the OCC began reporting mortgage performance in 2008.
Seriously delinquent mortgages — 60 or more days past due or held by bankrupt borrowers whose payments are 30 days or more past due — decreased to 3.1% compared with 4% a year earlier.
The percentage of mortgages that were seriously delinquent decreased 22.4% from a year earlier and is the lowest level since June 2008.
At the end of the first quarter of 2014, the number of mortgages in the process of foreclosure fell to 432,832, a decrease of 52.3% from a year earlier. The percentage of mortgages that were in the process of foreclosure at the end of the first quarter of 2014 was 1.8%, the lowest level since September 2008.
Servicers implemented 237,133 home retention actions (modifications, trial-period plans, and shorter-term payment plans) in the quarter compared with 71,678 home forfeiture actions (completed foreclosures, short sales, and deed-in-lieu-of-foreclosure actions).
The number of home retention actions implemented by servicers decreased 32.1% from a year earlier. Almost 91% of modifications in the first quarter of 2014 reduced monthly principal and interest payments, and 58.6% of modifications reduced payments by 20% or more. Modifications reduced payments by $292 per month on average, while modifications made under the Home Affordable Modification Program reduced monthly payments by an average of $312.
Servicers implemented 3,460,476 modifications from January 1, 2008, through December 31, 2013. Of these modifications, 60% were active at the end of the first quarter of 2014 and 40% had exited the portfolios of the reporting institutions, through payment in full, involuntary liquidation — completed foreclosure, short sale or deed-in-lieu of foreclosures — or transfer to a non-reporting servicer.
Of the 2,071,078 modifications that were active at the end of the first quarter of 2014, 69.9% were current and performing at quarter end, 23.9% were delinquent, and 6.1% were in the process of foreclosure.