First-quarter mortgage performance largely held as modifications grew 7.4%, OCC snapshot shows

Of the residential mortgage loans included in the national bank regulator’s June mortgage metrics report, 97.4% were current and performing at the end of the first quarter – up 0.2% from the fourth quarter of 2023 but down 0.4% from the same period one year ago, the report shows.

The Office of the Comptroller of the Currency (OCC), in the quarterly report, also noted a 7.4% increase in loan modifications during the quarter – loan term extensions, capitalization of delinquent interest and fees, interest rate reductions or freezes, principal deferrals, and principal reductions. Nearly half of these reduced borrowers’ monthly payment amounts, the report says.

The report focuses on the first-quarter performance of 21.4% of all residential mortgage debt outstanding in the United States – approximately 11.5 million loans totaling $2.8 trillion in unpaid principal balances, the OCC said.

In the first quarter, the OCC said, servicers initiated 7,408 new foreclosures in the first quarter of 2024, down from 11,459 initiated the same period one year ago. Home forfeiture actions during the first quarter of 2024 – completed foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions – totaled 1,989, down 25.2% from 2,661 a year earlier, the report shows.

“Events associated with the COVID-19 pandemic, including foreclosure moratoriums that began March 18, 2020, and ended July 31, 2021, have significantly affected these metrics,” the report states.

The report shows that servicers completed 7,926 modifications during the first quarter of 2024, up 7.4% from the 7,382 completed the previous quarter. The changes break down as follows:

  • Of these 7,926 modifications, 6,991, or 88.2 %, were “combination modifications” – modifications that included multiple actions affecting the affordability and sustainability of the loan, such as an interest rate reduction and a term extension. Of the remaining 935 loan modifications, 887 received a single action and 48 were not assigned a modification type.
  • Among the 6,991 combination modifications completed during the quarter, 5,862, or 83.9%, included a term extension; 5,749, or 82.2%, included capitalization of delinquent interest and fees; 2,482, or 35.5%, included an interest rate reduction or freeze; 2,087, or 29.9%, included principal deferral; and 6, or 0.1%, included principal reduction.
  • Of the 7,926 modifications completed during the quarter, 3,878, or 48.9%, reduced the loan’s pre-modification monthly payment.

The percentage of seriously delinquent mortgages – mortgages that are 60 or more days past due and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due – decreased from the previous quarter and has trended down since the first quarter of 2022, the OCC said.

OCC Reports Mortgage Performance for First Quarter of 2024

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