OCC report: Mortgage performance improves in second quarter

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

The OCC Mortgage Metrics Report showed that 97% of mortgages were current and performing at the end of the quarter, compared to 95% 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 1.5% in Q2, compared to 1.8% in the prior quarter and 3.8% a year ago.

Servicers initiated 11,015 new foreclosures in Q2, a decrease from the prior quarter and a year earlier, but was comparable to pre-COVID-19 pandemic foreclosure volumes. Servicers completed 28,109 modifications, a decrease of 33.7% from the previous quarter. Of the modifications, 78.2% reduced borrowers’ monthly payments and 95.6% 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 $2.7 trillion in principal balances.