Mortgage Performance Improved During the Second Quarter 2015

Summary

Second quarter 2015 data from eight national banks showed first-lien mortgages continued to improve from a year ago, according to the Office of the Comptroller of the Currency’s (OCC) quarterly report on mortgage performance.

The OCC Mortgage Metrics Report, Second Quarter 2015, showed 93.8 percent of mortgages included in the report were current and performing at the end of the quarter, compared with 92.9 percent a year earlier. The percentage of mortgages that were 30 to 59 days past due was 2.2 percent of the portfolio, a 7.9 percent decrease from a year earlier. Seriously delinquent mortgages—60 or more days past due or held by bankrupt borrowers whose payments are 30 days or more past due—made up 2.6 percent of the portfolio—a 16.0 percent decrease from a year earlier. Mortgage performance declined slightly from the previous quarter, consistent with observed seasonal trends.

Foreclosure activity among the reporting servicers also declined from a year ago. The number of mortgages in the process of foreclosure at the end of the second quarter of 2015 was 299,500, a decrease of 23.5 percent from a year earlier. The percentage of mortgages within this portfolio that were in the process of foreclosure at the end of the second quarter of 2015 was 1.4 percent. Servicers initiated 70,728 new foreclosures during the quarter, a decrease of 11.3 percent from a year earlier. The number of completed foreclosures decreased 23.4 percent from a year earlier to 37,275. Improved economic conditions and foreclosure prevention assistance contributed to the decline in foreclosure activity.

Servicers implemented 179,382 home retention actions during the quarter—including modifications, trial-period plans, and shorter-term payment plans. More than 86 percent of modifications made during the second quarter of 2015 reduced monthly principal and interest payments; 52.0 percent of modifications reduced payments by 20 percent or more. Modifications reduced payments by $245 per month on average.

Servicers implemented 3,747,455 modifications from January 1, 2008, through March 31, 2015. Of these modifications, 52 percent were active at the end of the second quarter of 2015, and 48 percent had exited the portfolio through payment in full, involuntary liquidation, or transfer to a non-reporting servicer. Of the 1,943,467 active modifications at the end of the second quarter of 2015, 71.7 percent were current and performing, 22.8 percent were delinquent, and 5.4 percent were in the process of foreclosure.

The mortgages in this portfolio comprise 43 percent of all residential mortgages outstanding in the United States—22.1 million loans totaling $3.8 trillion in principal balances. This report provides information on their performance through June 30, 2015.