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Third Quarter 2011

Overall Mortgage Performance Stable, Delinquencies Remained Elevated in Third Quarter 2011

This publication is part of:

Collection: Mortgage Metrics Report


The performance of first-lien mortgages serviced by large national banks and federal savings association was stable, but delinquencies remained elevated during the third quarter of 2011, according to a report released today by the Office of the Comptroller of the Currency (OCC).

The quarterly OCC Mortgage Metrics Report showed delinquencies remained elevated but stable during the third quarter of 2011 but have declined from a year earlier. However, the number of new foreclosures increased by 21.1 percent during the quarter as servicers lifted voluntary moratoria implemented in late 2010 and exhausted alternatives to foreclosure for the large inventory of seriously delinquent mortgages working through the loss mitigation process. The increase in new foreclosures and the increase in average time required to complete foreclosures sales has resulted in the number of foreclosures in process increasing to 4.1 percent of the overall portfolio, or 1,327,077 loans, at the end of the third quarter of 2011.

At the end of the third quarter of 2011, 88 percent of the 32.4 million loans in the portfolio were current and performing at the end of the third quarter, almost unchanged from the previous quarter. The percentages of mortgages that were 30-to-59 days delinquent and mortgages that were seriously delinquent (loans 60 or more days delinquent or delinquent mortgages to bankrupt borrowers) did not change from the previous quarter. However, both categories of delinquencies have declined from a year earlier.

Other key findings of the report included:

  • On average, the modifications implemented in the third quarter of 2011 reduced borrowers’ monthly principal and interest payments by 24.4 percent, or $382. Modifications made under the Home Affordable Modification Program (HAMP) reduced payments by 35.1 percent on average, or $567.
  • Modifications that reduced payments by 10 percent or more performed better than those that reduced payments by less. At the end of the third quarter of 2011, 58.8 percent of modifications made since the beginning of 2008 that reduced payments by 10 percent or more were current and performing, compared with 36.4 percent of modifications made during that time that reduced payments by less than 10 percent.
  • Since the beginning of 2008, servicers have modified 2,258,026 mortgages through the end of the second quarter of 2011. At the end of the third quarter of 2011, 50.8 percent of those modifications remained current or had been paid off. Another 8.8 percent were 30-to-59 days delinquent, and 17.8 percent were seriously delinquent. Eleven percent were in the process of foreclosure and 5.8 percent had completed the foreclosure process.

The report covers about 62 percent of all first-lien mortgages in the United States, worth $5.6 trillion in outstanding balances.