First Federal Bank of California, a wholly owned subsidiary of FirstFed Financial Corp., modified more than $1.4bn in residential mortgages in September. It created workout plans for nearly 3,000 California distressed borrowers as its modification program continued to outperform industry averages, according to a statement. Due to the modifications, overall loan delinquencies dropped as of Sept. 30, 2009, compared to peak levels. Loans 30 to 59 days delinquent fell to $70.6m, 55% lower than the $157.5m on January 31, 2009. Loans 60 or more days delinquent decreased to $16.8m, or 95% lower than the $431.3m on Feb. 28, 2009. Loans in foreclosure fell 38% to $281.8m from $456.2m on June 30, 2009. July to September were the busiest months for First Federal Bank of California since it began the modification program in February 2008, nearly 900 mortgages worth $442m were modified. In all, 2,927 mortgages were modified. The bank said its modifications are also outperforming the national average. The bank said 28.3% of the loans it modified in Q108 were at least 30 days delinquent 12 months after they were modified. The national average is 65.9%, First Federal Bank of California said, according to the September report of the Office of the Comptroller of the Currency and the Office of Thrift Supervision. First Federal Bank of California credited the better recidivism rate to its strategy of holding the mortgages in its own portfolio and flexibility in working with borrowers. The 80-year-old bank is based in Southern California and said its successfully modified more than one-third of its option adjustable-rate mortgage (ARM) loan portfolio. Write to Austin Kilgore.