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Foreclosures Ease, Delinquency Worsens

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The number and volume of U.S. mortgages serviced by banks and thrifts is on the decline. Delinquency, however, in still on the rise — though new foreclosure filings eased. Nearly one-in-three adjustable-rate mortgages with payment options were delinquent — more than double the rate a year ago.

Banks and thrifts serviced 33,832,014 loans for $5.9692 trillion as of June 30, according to the OCC and OTS Mortgage Metrics Report jointly released today by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

Loans serviced declined from 34.1 million mortgages for $6.0145 trillion three months earlier and 34.6 million loans for $6.1055 trillion 12 months earlier.

Just over two-thirds of the June 30 loans were prime, while only 10 percent were Alternative-A and 8 percent were subprime.
Prime mortgages include loans where the credit score was at least 660, while scores lower than 620 were considered subprime. Borrowers with scores between 620 and 659 were considered Alt-A.

The aggregate servicing portfolio accounted for around 64 percent of all U.S. mortgages, indicating that total residential mortgages outstanding ended June at around $9.3269 trillion.

The report indicated that loan delinquency of at least 30 days, including foreclosures in process, ended June at 11.4 percent, climbing from 10.2 percent at the end of March and 7.50 percent on June 30, 2008.

On just government-guaranteed loans, total delinquency rose to 15.20 percent at the end of the second quarter from 13.8 percent on March 31 and 12.80 percent last year.

Looking at option-ARMs, late payments finished June at 29.7 percent — higher than 27.1 percent three months prior. Option-ARM delinquency was just 14.5 percent on June 30, 2008.

Serious delinquency — which includes loans past due at least 60 days but excludes loans in foreclosure — was 3.0 percent on prime mortgages, 10.3 percent on Alt-A loans and 17.8 percent on subprime mortgages. Government serious delinquency was 7.50 percent, while the overall rate for all loan types was 5.3 percent.

“The mortgage data reported for the second quarter of 2009 continued to reflect negative trends influenced by weakness in economic conditions including high unemployment and declining home prices in weak housing markets,” the report explained.

New foreclosure filings amounted to 369,226 in the second quarter, easing from 370,567 in the first quarter but more than 288,458 during the same period last year. Second-quarter filings included 194,071 prime loans, 68,622 Alt-A mortgages and 69,382 subprime loans.

Foreclosures in process increased to 2.9 percent on all mortgage types from 2.5 percent on March 31 and 1.6 percent a year earlier.

For just government-guaranteed loans, foreclosures rose to 2.0 percent from the first quarter’s 1.9 percent and the prior years 1.3 percent.

Option-ARM foreclosures in process stood at a whopping 10 percent, up from 8.7 percent the prior quarter and 4.5 percent the prior year.

Foreclosures were completed on 106,007 mortgages during the second quarter, climbing from 90,696 in the prior period but lower than 117,325 in the prior year.

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