National Banks Report Improving Loan Performance

Another measure of returning normalcyrncame on Thursday with a report from the Office of Comptroller of the Currencyrn(OCC) on mortgage loan performance.  Thernregulator said that 94.2 percent of the first mortgages serviced by eight largernnational banks it regulates were current and performing in the first quarter ofrn2015.  This is an increase from 93.1rnpercent in the first quarter of 2014. The mortgages in this portfolio comprisern43.9 percent of all residential mortgages outstanding in the United States-22.7rnmillion loans totaling $3.8 trillion in principal balances.</p

Loans in early stage delinquency – 30 torn59 days past due – represented 1.9 percent of the total, a 7 percent decreasernfrom a year earlier.  There was a morernsubstantial year-over-year improvement in the percentage of loans that were 60rnor more days past due or held by borrowers more than 30 days past due and inrnbankruptcy, down 16.4 percent to a 2.6 percent rate.</p

Servicers reported that their foreclosurerninventories, loans in the process of foreclosure at the end of the quarter,rndecreased by 30.8 percent from the previous year to 299,424 loans, a rate ofrn1.3 percent.   There were 83,058 loansrnput into the foreclosure process, down 8.6 percent from the first quarter ofrn2014, and completed foreclosures decreased 31.5 percent to 38,509.  </p

Foreclosures, short sales, andrndeeds-in-lieu of foreclosure resulted in 47,430 home forfeitures compared to 188,816rnhome retention actions implemented during the quarter.  These included loan modifications, trial-periodrnplans, and shorter-term payment plans. The number of home retention actionsrnimplemented by servicers was down 20.6 percent from a year earlier.  </p

OCC said that between January 1, 2008rnand December 31, 2014 servicers for the eight banks implemented 3.70 millionrnloan modifications and approximately 1.97 million or 53 percent remained activernthrough the end of Q1 2015.  Of these, 72.2rnpercent were current and performing, 22.4 percent were delinquent, and 5.5rnpercent were in the process of foreclosure. rnThe other 47 percent had exited from servicers’ portfolios through payoffs,rninvoluntary liquidation, or transfer to another servicer.   

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