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Home Retention Actions were Double Home Forfeitures in Q3

by devteam December 22nd, 2012 | Share

The Office ofrnComptroller of the Currency (OCC) reported today that 88.6 percent of thernmortgages serviced by selected national federal savings banks were current andrnperforming at the end of the third quarter. rnThe OCC Mortgage MetricsrnReport released this morningrncovers portfolios containing 29.8 million loans, 58 percent of all mortgagesrnoutstanding in the U.S, with $5.1 trillion in principal balances.  Thernpercentage of performing mortgages declined by one tenth ofrnone percent fromrn88.7 percent in the second quarter, but increased 0.7 percent from the same period arnyear ago.rn </p

The early delinquency rate (30 to 59 days past due) increased 10.4rnpercent in the third quarter to 3.1 percent, 3.6 percent above the rate in thernthird quarter of 2011 while the percentage of mortgages that were 60 or morerndays past due or 30 days if the borrower was in bankruptcy, was unchangedrnquarter-over-quarter at 4.4 percent but was down 10.8 percent from a yearsrnearlier.</p

The report says foreclosure activity remains elevated asrnthe large numbersrnof mortgages andrnforeclosuresrnin process workrnthrough foreclosure prevention andrnloss mitigation processes.rnServicers initiated 252,604rnnewrnforeclosures during the third quarter of 2012rna drop of 95,124 foreclosure starts than the same period a year earlierrnand a decrease of 16.5 percent from thernprevious quarter.   The number of mortgagesrnin the foreclosure processrndeclined by 167,730 loans from a year ago to 1,158,289-a decrease of 6.4 percent from thernprevious quarter andrn12.6 percent fromrna year earlier. The number of completed foreclosuresrnrose to 114,742, a 12.8 percentrnincrease from the previousrnquarter and a 1.3rnpercent increase fromrna year earlier.</p

The percentage of current and performing government-guaranteed mortgages, which comprise almost one-quarter of the portfolio, declined in the third quarter from 84.9 percent in the second quarter to 84.3 percent.  In the third quarter of 2011 85.2 percent of these mortgages were current and performing.</p

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Mortgagesrnserviced for the two government sponsored enterprises (GSEs) Fannie Mae and Freddie Macrnmade up 58 percentrnof the mortgages in this report.  Current and performing loans made up 93.6rnpercent of the GSEs’ portfolios, a -.04 change from the second quarter andrn-0.06 from a year earlier.  </p

There were 382,899 home retention actions initiated by servicers in the third quarter, 8.9 percent fewer than in the second quarter and 16.6 percent less than one year earlier.  These actions included modifications and shorter-term payment plans.  This was more than double the 180,389 home forfeiture actions initiated during the quarter.  Home forfeitures increased 7.7 percent from the second quarter and 4.0 percent from one year earlier; Completed foreclosures increased by 12.8 percent from Q2 and 1.3 percent from a year earlier and short sales by 0.7 percent and 11.1 percent respectively.</p

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Home Affordable Modification Programrn(HAMP) modifications increased 10.0 percentrnfrom the previous quarter to 31,540 but decreasedrn41.5 percent from a year earlier.  Other modifications increased to 104,776-an increase of 54.2 percent and 25.3 percent respectively.  HAMPrntrial-periodrnplans decreased by 13.7 percentrnfrom the previous quarter andrn25.1 percent from the previous year.  Other trial-periodrnplans decreased 38.7rnpercent from the previous quarter and 14.2rnpercent fromrna year earlier.</p

Servicers reducedrninterest rates in 77.2 percent of all modifications made during the third quarter of 2012rnand extended terms in 64.8 percent.  There were principalrndeferrals in 19.1 percent, and principalrnreductions in 17.1 percent.   Modificationsrnresulted in reduced monthly mortgage payments for nearly 90 percent of affectedrnborrowers. </p

Foreclosure starts decreased 16.5 percent quarter over quarter and 27.4rnpercent year over year.  The number ofrnforeclosures in process decreased 6.4 percent and 12.6 percentrnrespectively.  OCC said these numbers reflect a strengthening economy, a declining number of seriousrndelinquencies, and anrnemphasis on alternatives to foreclosure.</p

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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