OCC report: Mortgage performance improves in first quarter

The performance of first-lien mortgages in the federal banking system improved during the first quarter of 2022, according to an OCC report issued today.

The OCC Mortgage Metrics Report showed that 96.9% of mortgages were current and performing at the end of the quarter, compared to 94.2% a year earlier. The percentage of seriously delinquent mortgages—mortgages that are 60 or more days past due and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due—was 1.8% in the first quarter of 2022, compared to 2.3% in the prior quarter and 4.6% a year ago.

Servicers initiated 19,524 new foreclosures in the first quarter of 2022, an increase from the prior quarter and a year earlier as pandemic-related accommodations wound down. New foreclosure volume was comparable to pre-COVID-19 pandemic foreclosure volumes. Servicers completed 42,427 modifications in Q1, a decrease of 10.7% from the previous quarter. Of the modifications, 80.8% reduced borrowers’ monthly payments, 97.4% were modifications that included multiple actions affecting the affordability and sustainability of the loan, such as an interest rate reduction and a term extension.

The first-lien mortgages included in the OCC’s quarterly report comprise 22% of all residential mortgage debt outstanding in the United States or approximately 12.2 million loans totaling $2.6 trillion in principal balances.