Prime Mortgages, Loan Mods Continue to Failby Tim Manni
The Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) released their Mortgage Metrics Report for the Third Quarter 2009. According to the report, while “home retention actions” continue to increase, so did both prime mortgage delinquencies as well as loan modification re-defaults.
From the joint release (emphasis added):
…the percentage of current and performing mortgages dropped for the sixth consecutive quarter to 87 percent of the servicing portfolio, serious delinquencies rose to 6.2 percent, and foreclosures in process surpassed 1 million mortgages, or about 3.2 percent of the servicing portfolio. Of particular note was the deterioration among prime mortgages, the largest category of mortgages. Serious delinquencies at the end of the third quarter increased to 3.6 percent of prime mortgages, up almost 20 percent from the previous quarter and more than double a year ago.
Although the volume of home retention actions increased in the third quarter and the most recent vintage of loan modifications had lower early re-default rates than older vintages, modified loans continued to re-default at high rates overall. More than half of all modified loans re-defaulted within six months of modification, with re-default defined as 60 or more days delinquent or in foreclosure.
Click here to view the OCC’s complete report.