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Mortgage Performance Continues to Improve

Overall mortgage performance continues to improve, according to the Office of the Comptroller of the Currency’s (OCC) Mortgage Metrics Report for Q4 2016. The report, released on Friday, showed 94.7 percent of mortgages were current and performing at the end of Q4 2016, compared with 94.1 percent a year earlier.

The OCC reports that banks serviced approximately 19.8 million first lien mortgage loans at the end of Q4 2016, with $3.45 trillion in unpaid principal loans. In addition, servicers initiated 45,495 new foreclosures in Q4 2016, a decrease of 5.1 percent from the previous quarter. Home forfeiture actions in total—including completed foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions— decreased by 32.3 percent year-over-year.

Foreclosures have been on a decline since at least Q4 2014, according to the OCC report. The amount of completed foreclosures dropped from 2 years ago by almost 19,000, while deed-in-lieu-of-foreclosure actions have dropped from 1.2 thousand to 0.8 thousand. Newly initiated foreclosures dropped from 75.4 thousand in Q4 2014 to 45.5 thousand at the end of Q4 2016.

According to the OCC, loan modifications decreased in Q4 2016, from 35,642 in Q3 to 32,312 loan modifications in Q4, a 9.3 percent decrease. 93.3 percent of these modifications were “combination modifications,” or modifications that included multiple actions affecting affordability and sustainability of the loan. The remaining 6.7 percent were not assigned a loan modification type. Of the 32,312 modifications, 89.3 percent successfully reduced the loan’s pre-modification monthly payment

Of all 50 states, Texas experienced the most total modification actions, at 2,728, followed by California at 2,678.

The OCC’s report covers first-lien mortgages, and excludes junior liens, Home Equity Lines of Credit, and Home Equity Conversion Mortgages (reverse mortgages).

You can find the complete report from the OCC here.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.

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