Mortgage Performance Decline Continues

April 5, 2010

Mortgages 90 or more days past due grew to 4.7 percent of all mortgages at the end of 2009.

Performance on home mortgages declined for the seventh consecutive quarter in the fourth quarter of 2009, though home foreclosures slowed and new home retention actions continued, according to a report released on March 25, 2010, by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS).

The OCC and OTS Mortgage Metrics Report for the fourth quarter of 2009 showed the overall percentage of current and performing mortgages fell to 86.4 percent at the end of 2009, driven by an increase in mortgages that were 90 or more days past due. Prime mortgages, which make up two-thirds of the mortgages in the portfolio, continued to have the greatest increases in delinquency, where the number of seriously delinquent mortgages increased by 16.5 percent during the fourth quarter. The overall percentage of mortgages 30-59 days delinquent remained stable and early stage delinquencies increased slightly.

According to the report, newly initiated foreclosures fell by more than 15 percent in the fourth quarter and foreclosures in process were stable, as mortgages remained delinquent for longer periods before entering the foreclosure process and the servicers evaluated more borrowers for loss mitigation and foreclosure prevention programs. However, servicers report they expect new foreclosure actions to increase in upcoming quarters as alternatives to prevent foreclosure are exhausted and a larger number of seriously delinquent mortgages slip into foreclosure.

Servicers implemented more than 594,000 new home retention actions during the quarter, including 259,410 new trial plans initiated under the Home Affordable Modification Program (HAMP) and 21,316 existing trial plans converted to permanent HAMP modifications. The actions also included 102,102 loan modifications, 94,667 trial plans, and 116,600 payment plans for borrowers who did not qualify for HAMP.

The complete report can be downloaded from the OCC and OTS Web sites.