The latest gauge of mortgage servicing by federally regulated banks indicates that their servicing portfolios are contracting and delinquency is improving.
Prime loans, those with borrower credit scores of at least 660, accounted for 76 percent of first mortgages serviced by banks as of the fourth-quarter 2015.
The share of prime residential loans serviced by banks, which is based on the number of loans, turned out to be no different than in the fourth-quarter 2014.
The details were included in the Office of the Comptroller of the Currency’s OCC Mortgage Metrics Report Disclosure of National Bank Mortgage Loan Data Fourth Quarter 2015.
Alt-A loans, where the borrower’s score was at least 620 and up to 659, made up 10 percent of the loan population, also the same as a year earlier.
Borrowers whose scores fell below 620 were considered subprime. The share of loans that were subprime slipped to 5 percent from 6 percent.
The 21.473 million loans for $3.678 trillion serviced by the eight banks covered in the report as of the fourth-quarter 2015 accounted for 41 percent of all first mortgages outstanding.
Servicing portfolios at the surveyed banks fell from 21.850 million loans for $3.727 trillion as of the third quarter and 23.122 million mortgages for $3.906 trillion as of the final quarter of 2014.
The OCC noted that more than 90 percent of the loans covered in the report were serviced for third parties.
The rate of 30-day delinquency, including foreclosures in process, was cut by the banks to 5.9 percent as of the fourth-quarter 2015 from 6.1 percent as of the end of the prior period and 6.8 percent as of the end of 2014.
The foreclosure rate fell to 1.1 percent at the end of last year from 1.4 percent as of Dec. 31, 2014.
The OCC reported that 138,200 foreclosures were completed during all of 2015,
fewer than the 189,400 repossessions the prior year.