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Mortgage Balances Decline

loan applicationsThe Office of the Comptroller of the Currency (OCC) has released its Q2 2018 report on mortgages, the OCC Mortgage Metrics Report. The report is a collection of data on first-lien residential mortgage loans serviced by seven national banks with large mortgage-servicing portfolios.

According to the report, the reporting banks serviced approximately 17.5 million first-lien mortgage loans with $3.28 trillion in unpaid principal balances, and has been on a steady decline since Q2 2016. According to the OCC, this $3.28 trillion was 33 percent of all residential mortgage debt outstanding in the United States.

Mortgage performance was found to have remained relatively unchanged year over year. The percentage of mortgages that were current and performing at the end of the second quarter of 2018 was 95.6 percent, compared with 95.4 percent the previous year.The majority of these loans were considered prime, at 91 percent, with 2 percent considered subprime, another 2 percent as Alt-A, or mortgages to prime quality borrowers but do not satisfy the criteria for conforming or jumbo loan programs.

Additionally, the report covered delinquency and foreclosure rates for Q2 2018. OCC data show that the concentration of seriously delinquent loans and foreclosures in process remains relatively low.

According to the report, 2.1 percent of loans were 30-59 days delinquent, and another 1.8 percent were in serious delinquency. Just 0.5 percent of loans were in foreclosure as of Q2 2018. In real numbers, the OCC found there to be 173 thousand foreclosures in process.

Between Q1 and Q2 2018, the OCC found that newly initiated foreclosures fell by 20.6 percent, from 37.3 thousand to 29.6 thousand.

Servicers completed 32,655 modifications during the second quarter of 2018, a 39.4 percent increase from the Q1 23,427 modifications. Of these 32,655 modifications, 24,392, or 74.7 percent, were “combination modifications”, and of these combination modifications, 95.1 percent included capitalization of delinquent interest and fees. Of the 32,655 modifications total Q2 modifications, 20,920, or 64.1 percent, reduced the loan’s pre-modification monthly payment.

Find the complete data 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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