Nearly Half of Modified Mortgages Current According to The OCC

The Office of the Comptroller of the Comptroller of the Currency today released their Mortgage Metrics Report for the Fourth Quarter of 2011, focusing on delinquency, foreclosure, and modification statistics for 31.4 million first-lien mortgages (about 60 percent of all first lien mortgages) in the U.S.

excerpts from the release…

The large number of delinquent loans continues to work through the loss mitigation process.  Servicers initiated 460,213 new home retention actions-modifications, trial-period plans, and payment plans.  During the past five quarters, servicers initiated more than 2.4 million home retention actions-772,425 modifications, 902,860 trial-period plans, and 731,927 payment plans. 

Completed foreclosures increased to 116,060-up 2.5 percent from the previous quarter and 22.1 percent from the fourth quarter of 2010.  However, the number of new foreclosures initiated during the quarter decreased to 292,173-down 16 percent from the previous quarter.  The inventory of foreclosures in process also decreased to 1,272,287-down 4.1 percent from the previous quarter and 3.1 percent from a year earlier. 

Since the beginning of 2008, servicers have modified 2,395,565 mortgages through the end of the third quarter of 2011.  At the end of the fourth quarter of 2011, 48.3 percent of those modifications remained current or had been paid off.  Another 8.5 percent were 30-to-59 days delinquent, and 17.4 percent were seriously delinquent.  There were 10.6 percent in the process of foreclosure and 6.1 percent had completed the foreclosure process. 

As can be noted in the table below, well over half the modifications that reduced payments more than 10% remained current or are paid off with HAMP programs significantly outperforming other modification programs (66.1% to 50.9%).  The overall statistics are brought down by modifications that resulted in less than a 10 percent reduction in payment, where only 34.5% remain current and 2.1% are paid off. 

Fannie and Freddie guaranteed loans performed noticeably better than Government-Guaranteed loans such as those from the FHA and VA.  Among the GSE’s, Freddie outperformed Fannie just slightly, with an 11.3% re-default rate 3 months after a modification versus Fannie’s 11.7%.  Redefault rates jumped across the board at the 6, 9, and 12 month time frames.  Portfolio Conforming loans were the best performers.

Full Report HERE


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