WASHINGTON, June 27 U.S. banks held fewer
troubled mortgages in the first quarter of 2012, according to a
report issued on Wednesday by the Office of the Comptroller of
the Currency, as loans serviced by national banks performed
better in the first three months of the year.
The report said the overall quality of serviced mortgages
improved, and the percentage of serviced loans that were current
and performing at the end of March was 88.9 percent, the highest
level in three years. The improvement was due to an uptick in
the economy and continued emphasis on programs intended to keep
borrowers in their houses, the OCC said.
Overall, the percentage of mortgages that were 30 to 59 and
60 to 89 days delinquent also decreased to their lowest levels
since the OCC began tracking the mortgage data in the first
quarter of 2008. The percentage of mortgages in the portfolio
that were 30 to 59 days delinquent at the end of the first
quarter decreased by 17.3 percent from the previous quarter and
by 3.8 percent from a year earlier.
"This improvement can be attributed to several factors,
including strengthening economic conditions during the quarter,
seasonal effects, servicing transfers, and the ongoing effects
of both home retention loan modification programs as well as
home forfeiture actions," the OCC said in the quarterly report.
The number of foreclosures in process decreased from a year
ago, edging down 1.8 percent from the previous quarter and by
8.1 percent from a year earlier.
However, the percentage of mortgages in the process of
foreclosure at the end of the first quarter of 2012 increased,
rising by 1.8 percent from the previous quarter and 2.3 percent
from a year earlier.
"This reduction in new foreclosures is attributable to
servicers' ongoing emphasis on modifications and other loss
mitigation programs, a declining number of seriously delinquent
mortgages over the last year, and slower initiation of new
foreclosure referrals," according to the OCC.
Banks have been forced to change their foreclosure processes
after illegal filings and improper handling of documents
surfaced and institutions were accused of taking shortcuts in
the years following the 2007-2009 financial crisis to speed up
In February, Bank of America, JPMorgan Chase & Co ,
Citigroup Inc, Wells Fargo and Ally Financial struck a $25
billion deal with state attorneys general and the Justice
Department to settle allegations of foreclosure abuses.
The report covers the performance of about 60 percent of all
mortgages outstanding in the United States, or 31 million loans
totaling $5.3 trillion.
The OCC Mortgage Metrics Report provides performance data on
first-lien residential mortgages serviced by national banks and
federally regulated thrifts.