Alert June 17, 2008

OCC Releases Mortgage Metrics Report

The OCC released a report focused on delinquencies, loss mitigation actions, and foreclosures in mortgage loans serviced by national banks. In February of this year, the OCC began requiring the nine largest national bank mortgage loan servicers to submit comprehensive mortgage loan data on a monthly basis. The report analyzes data submitted on each of the more than 23 million loans held or serviced by these nine banks from October 2007 through March 2008. The $3.8 trillion portfolio represents 90% of mortgages held by national banks and about 40% of mortgage loans overall. Findings of the report include:

  • The overall mortgage servicing portfolio of the nine banks reflects credit quality that is relatively satisfactory and relatively stable. The number of current and performing loans remained at about 94% over the entire six-month period.
  • While subprime mortgage loans constituted less than 9% of the total portfolio, they sustained twice as many delinquencies as either prime or Alt-A mortgage loans.
  • Serious delinquencies, defined as bankrupt borrowers who are 30 days delinquent and all delinquencies greater than 60 days, increased just one-tenth of a percentage point during the period, from 2.1% to about 2.2%.
  • Among loss mitigation actions, payment plans predominated, outnumbering loan modifications in March 2008 by more than four to one, but loan modifications increased at a much faster rate during the period.
  • Subprime mortgage loans accounted for 43% of all loss mitigation actions at the end of March, while making up less than 9% of the portfolio. Loss mitigation actions exceeded newly initiated foreclosures among subprime borrowers by nearly 2 to 1.
  • Foreclosures in process are on the rise – climbing from 0.9% of the portfolio to 1.23% – but the number of new foreclosures varied considerably month to month and was down substantially in March from a high in January.
  • Seriously delinquent subprime loans had fewer new foreclosure starts than similarly delinquent prime or Alt-A mortgages, perhaps reflecting the national emphasis on developing alternatives and assistance programs for this class of borrowers.
Click here for a copy of the report.