Data on the performance of first-lien mortgages loans serviced by seven national banks with large mortgage-servicing portfolios shows 97.3% of the loans were current and performing at the end of the third quarter, unchanged from the previous quarter and slightly improved from a year ago.
That’s according to the Office of the Comptroller of the Currency (OCC), which released the data Tuesday in its third-quarter Mortgage Metrics Report.
The agency pointed out that the mortgages included in the report comprise 22% of all residential mortgage debt outstanding in the United States, or approximately 11.8 million loans totaling $2.7 trillion in unpaid principal balances. This quarterly snapshot does not provide statistically representative picture of loan performance, the report points out.
A footnote in the report shows the findings are based on first-lien mortgage data from Bank of America, Citibank, HSBC, JPMorgan Chase, PNC, U.S. Bank, and Wells Fargo.
Overall, the report shows that:
- Overall mortgage performance in the third quarter improved from a year ago, when the percentage of mortgages current and performing at the end of the quarter was 97.2%.
- Servicers initiated 8,965 new foreclosures in the third quarter of 2023, up from 7,480 in the prior quarter but down from 9,835 in the third quarter of 2022.
- There were 2,244 home forfeiture actions during the third quarter of 2023 – completed foreclosure sales (2,136), short sales (95), and deed-in-lieu-of-foreclosure actions (13) – down 17.3% from a year earlier, when there were 2,714 such actions (which included 151 short sales).
The OCC credited the CARES Act and foreclosure moratoriums implemented amid the pandemic for many of the improved metrics.
In figures on loan modifications, the OCC reported:
- Servicers completed 7,436 modifications during the third quarter of 2023, down 13.8% from the previous quarter’s 8,623 modifications.
- Of these 7,436 modifications, 6,367, or 85.6%, were “combination modifications,” which included multiple actions affecting the affordability and sustainability of the loan, such as an interest rate reduction and a term extension. Of the remaining 1,069 loan modifications, it said 1,045 received a single action, and 24 were not assigned a modification type.
- Among the 6,367 combination modifications completed during the quarter, 5,549, or
1%, included a term extension; 5,422, or 85.1%, included capitalization of delinquent interest and fees; 2,059, or 32.3%, included an interest rate reduction or freeze; 1,805, or 28.3%, included principal deferral; and 10, or 0.1%, included principal reduction. - Of the 7,436 modifications completed during the quarter, 3,426, or 46.1%, reduced the loan’s pre-modification monthly payment.