OCC Reports on Mortgage Performance For Fourth Quarter of 2013

Summary

The performance of first-lien mortgages serviced by large national and federal savings banks continued to improve in the fourth quarter of 2013, according to a report released today by the Office of the Comptroller of the Currency (OCC).

The OCC Mortgage Metrics Report for the Fourth Quarter of 2013 showed 91.8 percent of mortgages were current and performing at the end of the quarter, compared with 91.4 percent at the end of the previous quarter and 89.4 percent a year earlier. The percentage of early stage delinquencies, mortgages that were 30-59 days past due, was 2.6 percent, down 8.7 percent from a year ago and the lowest level at year-end since reporting began in January 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 3.5 percent compared with 3.6 percent at the end of the previous quarter and 4.4 percent a year earlier. The percentage of mortgages that were seriously delinquent decreased 20.7 percent from a year earlier.

The number of loans in the process of foreclosure at the end of the fourth quarter of 2013 decreased 45.9 percent from a year earlier to 523,528. Servicers initiated 124,468 new foreclosures during the fourth quarter, a 20.6 percent decrease from a year earlier. The number of completed foreclosures decreased 42.6 percent to 60,765, compared to a year ago. Factors contributing to the reduction in foreclosure activity include improved economic conditions, foreclosure prevention assistance, and transfer of loans.

Servicers implemented 242,828 home retention actions (modifications, trial-period plans, and shorter-term payment plans) in the quarter compared with 84,031 home forfeiture actions (completed foreclosures, short sales, and deed-in-lieu-of-foreclosure actions). The number of home retention actions implemented by servicers decreased by 22.4 percent from the previous quarter and 34.0 percent from a year earlier. In the fourth quarter of 2013, 91.0 percent of modifications reduced monthly principal and interest payments, and 64.6 percent of modifications reduced payments by 20 percent or more. Modifications reduced payments by $344 per month on average, while modifications made under the Home Affordable Modification Program reduced monthly payments by an average of $422.

Servicers have modified 3,388,010 mortgages from the beginning of 2008 through the end of the third quarter of 2013. At the end of the fourth quarter of 2013, 43.4 percent of these modifications were current or paid off. Another 5.9 percent were 30 to 59 days delinquent, and 10.7 percent were seriously delinquent. Another 4.3 percent were in the process of foreclosure, and 8.0 percent had completed the foreclosure process.

The mortgages in this portfolio comprise about 49 percent of all mortgages outstanding in the United States—24.9 million loans totaling $4.2 trillion in principal balances. This report provides information on their performance through December 31, 2013.