Mortgage Daily Logo

Mixed Performance on Bank Mortgages

Mortgage News

Quarterly deterioration in residential performance at the nation’s banks was primarily concentrated in early-stage delinquency. While new foreclosure filings were higher, the number of completed foreclosures fell as home-retention activity rose. Re-defaults on modified agency and portfolio loans were lower than on loans serviced for third-party investors and government-guaranteed mortgages.

The rate of past-due payments on home loans serviced by U.S. thrifts and banks, including delinquency of at least 30 days and loans in foreclosure, was 11.3 percent as of June 30. Delinquency climbed from March 31, when the rate was 11.1 percent. But performance has improved from the second-quarter 2011, when mortgages with late payments accounted for 11.9 percent of outstanding loans.

The increase from the first quarter was primarily the result of delinquency between 30 and 59 days, which climbed to 2.8 percent from 2.5 percent.

Serious delinquency of at least 60 days slipped to 4.4 percent from the first quarter’s 4.5 percent and was 4.9 percent in the second-quarter 2011.

Prime mortgages had a 60-day rate of 2.4 percent, while the Alt-A rate was 9.0 percent and the subprime rate was 15.4 percent.

The findings were outlined in the OCC Mortgage Metrics Report released Thursday by the Office of the Comptroller of the Currency. The report reflects first-lien residential loans that are serviced by selected banks. No statistical sampling was used in the report, so the metrics don’t necessarily represent the overall U.S. population of home loans.

The 30,494,357 in first liens for $5.2223 trillion as of June 30 at the covered banks reportedly accounted for 60 percent of all U.S. mortgages.

Banks’ servicing portfolios fell from the 31,026,381 mortgages serviced for $5.3328 trillion as of the end of March. The total was 32,769,738 loans serviced for $5.6830 trillion at the same point in 2011.

Prime mortgages — those with credit scores of at least 660 — made up 72 percent of the second-quarter total. Alt-A mortgages accounted for 11 percent, and subprime share was 7 percent.

New foreclosure filings amounted to 302,636 in the second quarter, worse than the first quarter’s 286,951. New foreclosures were 5.4 percent worse than the second-quarter 2011.

Foreclosures in process totaled 1,237,025 in the second quarter, easing from 1,269,921 three months earlier. The inventory was down 6.2 percent from the same period in 2011. Foreclosures in process accounted for 4.1 percent of all outstanding loans as of June 30.

Banks completed 101,735 foreclosures during the latest period, fewer than the 122,979 real-estate-owned filings in the first three months of 2012. Repossessions improved 16.1 percent from a year earlier. The OCC explained that the decline was due to “servicers holding loans in the foreclosure process for longer periods of time in an effort to accomplish alternate loss mitigation or home forfeiture actions.”

Second-quarter short sales totaled 63,403, up 6 percent from the prior period. New deed-in-lieu-of-foreclosure actions were down 17 percent to 2,336.

At the same time, banks completed 416,036 home-retention actions during the three months ended June 30. That was more than the 352,988 actions completed in the prior quarter but fewer than the 456,222 actions in the same three months last year.

Proprietary loan modifications accounted for 63,935 of second-quarter home-retention actions, while modifications completed under the Home Affordable Modification Program represented another 28,279 actions. Proprietary trial-period plans numbered 178,528, HAMP trial-period plans totaled 25,444, and payment plans added up to 119,850 during the quarter.

Interest rates were reduced on 83 percent of second-quarter modifications, while term extensions were involved on 65 percent, principal deferrals were made on 21 percent and principal reduction occurred in 11 percent of modifications.

Out of all the 2,645,290 loans modified between 2008 and the first-quarter 2012, just 49 percent were current or paid off. On just HAMP loans, 65 percent were current — better than the 51 percent of proprietary modifications that were current.

The OCC noted, “HAMP modifications perform better largely because of the emphasis on reduced monthly payments, affordability relative to borrower income, required income verification, and successfully completing a required trial period.”

Modifications involving a payment reduction of at least 10 percent had a 55 percent current rate, while it dropped to 34 percent when the payment was reduced by less than 10 percent.

Within one year of modification, 35 percent of all modified loans became at least 60 days past due. The re-default rate was 48 percent on government-guaranteed loans that were modified, while it was 44 percent on mortgages serviced for private investors.

But on modified portfolio loans, the re-default rate was just 23 percent. Both Fannie Mae and Freddie Mac modifications had a 26 percent re-default rate.

Related Posts

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

There is No Such Thing as a Free House …

Over the past several years, those who service loans in the State of Washington(1) have seen a dramatic rise in the number of lawsuits in which delinquent borrowers seek to quiet title to their homes on the grounds that lenders are barred from foreclosing based on...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Mortgage Servicer Portfolios

servicing news | mortgages outstanding statistics | foreclosure news   Servicing Portfolios as of 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 Residential Servicing Portfolios by Servicer Last Updated December 14, 2018...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Fannie Mae Profile

Last Updated December 27, 2018 7:38 PM Central   full list | other directories | bank search | SEC filings | execs | m&a | production   Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move --...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Freddie Mac Profile

Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move -- which is likely to push mortgage rates lower and provide a sense of stability for the more than 10,000 employees at both companies -- is a...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI