WASHINGTON–Some 97.4% of mortgages were current and performing at the end of Q1, up 0.2 percentage points from Dec. 31, 2023, but down four basis points from Q1one year earlier, according to new data from the Office of the Comptroller of the Currency (OCC).
The OCC’s newest quarterly report also found a 7.4% increase in loan modifications during Q1, which involves loan term extensions, capitalization of delinquent interest and fees, interest rate reductions or freezes, principal deferrals, and principal reductions.
Nearly half of the modifications led to reductions in borrowers’ monthly payment amounts, according to the OCC, whose report data focuses on the first-quarter performance of 21.4% of all residential mortgage debt outstanding in the United States, or approximately 11.5 million loans totaling $2.8 trillion in unpaid principal balances.
The Data Points
As of March 31, the OCC reported:
- Servicers initiated 7,408 new foreclosures in the first quarter of 2024, down from 11,459 initiated the same period one year ago.
- Home forfeiture actions during the first quarter of 2024 – completed foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions – totaled 1,989, down 25.2% from 2,661 a year earlier, the report shows. “Events associated with the COVID-19 pandemic, including foreclosure moratoriums that began March 18, 2020, and ended July 31, 2021, have significantly affected these metrics,” the report states.
Breaking Down the Modifications
Meanwhile, the OCC said servicers completed 7,926 modifications during the first quarter of 2024, up 7.4% from the 7,382 completed the previous quarter.
The report shows:
- Of these 7,926 modifications, 6,991, or 88.2 %, were “combination modifications” – modifications that included multiple actions affecting the affordability and sustainability of the loan, such as an interest rate reduction and a term extension. Of the remaining 935 loan modifications, 887 received a single action and 48 were not assigned a modification type.
- Among the 6,991 combination modifications completed during the quarter, 5,862, or 83.9%, included a term extension; 5,749, or 82.2%, included capitalization of delinquent interest and fees; 2,482, or 35.5%, included an interest rate reduction or freeze; 2,087, or 29.9%, included principal deferral; and 6, or 0.1%, included principal reduction.
- Of the 7,926 modifications completed during the quarter, 3,878, or 48.9%, reduced the loan’s pre-modification monthly payment.
- 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 – decreased from the previous quarter and has trended down since the first quarter of 2022, the OCC said.
The full report can be found here.