Serious delinquencies -- mortgages 60 or more days past due and those delinquent but in bankruptcy -- rose to 5% of US residential mortgages at the end of the first quarter 2009, up almost double from the 2.7% rate seen in the year-ago period, according to a joint report by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The Q109 data show that "an overall worsening of conditions was met with a strong response in the form of increased modifications," federal regulators said in the quarterly OCC and OTS Mortgage Metrics Report, which covers more than 34 million loans totaling $6trn in principal balances and representing 64% of all outstanding US mortgages. "The first quarter data also showed a relatively greater increase in seriously delinquent prime mortgages compared with other risk categories and a higher number of foreclosures in process across all risk categories as a variety of moratoria on foreclosures expired during the first quarter of 2009," the report reads. Serious delinquencies among prime loans jumped 20% from the previous quarter to a total 2.9% of all prime mortgages. Subprime serious delinquencies, on the other hand, rose by 1.5% to a whopping 16.7% of all subprime mortgages in the porfolio. Along with rising delinquencies comes a likely increase in foreclosure actions. The regulators found that 844,389 mortgages -- or 2.5% of the total portfolio -- were in the foreclosure process at quarter-end as a variety of private and agency moratoriums expired during the quarter and the recession continued to put financial strain on borrowers. In response to this hardship, servicers stepped up modification efforts. Loan modifications initiated in the quarter reached 185,156 -- rising by 55.3% from the previous quarter and 172.3% from the year-ago quarter. This data does not include the administration's Making Home Affordable program, which took effect after the close of the quarter. The report notes 54.1% of modifications resulted in lower monthly payments, while 29.3% of modifications reduced payments by 20% or more. At the same time, modifications that resulted in higher payments slipped to 18.5% from 25% the previous quarter. Six months after modification in Q408, only 24% of the mortgages that had monthly payments reduced by 20% or more were 60 or more days past due, compared with 54% of mortgages with monthly payments left unchanged, and 50% with higher monthly payments. "Those modifications implemented in the fourth quarter of 2008 have re-defaulted at a slightly lower rate than the preceding quarter," the report's authors note. "However, it is too early to determine whether the data for the fourth quarter portend a sustained improvement in performance resulting from recent changes to modification practices." Write to Diana Golobay.