OCC and OTS Mortgage Metrics Report
First Quarter 2009
Modified Loans 60 or More Days Delinquent, by Changes to Monthly Payments: Re-Default Rate at Three, Six, Nine, and 12 Months after Modification
Modifications that decreased monthly payments had consistently lower re-default rates, with greater percentage decreases resulting in lower subsequent re-default rates. While lower payments reduce monthly cash flows, they may also result in longer term sustainability of the mortgage payments. After 12 months, 37.6 percent of modifications that decreased monthly payments by 20 percent or more were seriously delinquent. In contrast, 58.8 percent of modifications that left payments unchanged and 56.2 percent of modifications that increased payments were seriously delinquent after 12 months.
Re-Default Rates of Loans Modified in 2008 by Changes in Payment
(60 or More Days Delinquent)24 |
|
Three Months after Modification |
Six Months after Modification |
Nine Months after Modification |
12 Months after Modification |
Decreased by 20% or More |
14.7% |
24.3% |
27.7% |
37.6% |
Decreased by 10% to Less than 20% |
17.3% |
28.8% |
35.2% |
42.1% |
Decreased by Less than 10% |
19.9% |
36.1% |
43.0% |
47.4% |
Unchanged |
43.7% |
54.4% |
55.3% |
58.8% |
Increased |
30.8% |
50.0% |
57.7% |
56.2% |
24 Data include only those modifications that have had sufficient time to age the indicated number of months. For example, only modifications implemented during the first quarter 2008 have been in effect 12 months. Only those modifications implemented in first and second quarter 2008 have been in effect at least nine months. Only those modifications implemented in first, second, and third quarter 2008 have been in effect at least six months. Loans modified throughout 2008 have all been in effect at least three months.
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