96.5% of first-lien mortgages at 7 big banks were current in Q1; foreclosures down 10.9% from previous quarter

Mortgage data collected from seven national banks with large mortgage-servicing portfolios shows that 96.5% of first-lien residential mortgage loans serviced there remained current in the first quarter, up slightly from a year earlier (96.2%).

These servicers overall reported fewer foreclosures than in the previous quarter but more modifications, with 85.7% of those modifications reducing borrowers’ monthly payments, the report states.

The above information and more is taken from the Office of the Comptroller’s (OCC) Mortgage Metrics Report for first-quarter 2020, the first such report released since the onset of the global coronavirus (COVID-19) pandemic. The report incorporates mortgage servicing data from Bank of America, Citibank, HSBC, JPMorgan Chase, PNC, U.S. Bank, and Wells Fargo. The first-lien mortgages in this report comprise 28.7% of all residential mortgages outstanding in the United States, or approximately 15.4 million loans totaling $3 trillion in principal balances

According to the report, 94% of the first-lien loans covered by the report were to borrowers in the “prime” borrower risk category. That’s generally in keeping with previous quarters, but it’s up from 90% in the first quarter of 2018.

The report shows that the seven above-noted mortgage servicers initiated an aggregate 19,815 new foreclosures during the first quarter of 2020­, down 10.9% from the previous quarter and down 28.2% from a year ago.

These servicers completed 14,241 mortgage modifications in the first quarter of 2020, 8.3% more than in the previous quarter (13,147). Again, the report notes that 85.7% of the modifications reduced borrowers’ monthly payments. Also:

  • Of the total 14,241 modifications completed in the first quarter, 13,702 of them, or 96.2%, were “combination modifications” – modifications that included multiple actions affecting affordability and sustainability of the loan, such as an interest rate reduction and a term extension. Of the remaining 539 loan modifications, 500 received a single action and 39 were not assigned a modification type.
  • Among the 13,702 combination modifications during the quarter, 94% included capitalization of delinquent interest and fees, 68.8% included an interest rate reduction or freeze, 94% included a term extension, 0.6% included principal reduction, and 11.9% included principal deferral.

The OCC points out that the loans included in the analysis are not a statistically representative, random sample.

OCC Reports Mortgage Performance Remains Stable