3rd Quarter Mortgage Metric Report Goodies, #1.

The OTS Qtrly Mortgage Metrics report link in the right pane will get you to the recently released 3rd Quarter 2010  report.  From the Executive summary of that report I have copied and am pasting below an extensive series of national goodies from that report. (Later, I will add a second "goodies" post with data on Oregon mortgage metrics). The data summarized in this report represent 64 percent of all first-lien residential mortgages outstanding in the country from reporting institutions servicing 33.3 million first-lien mortgage loans, totaling more than $5.8 trillion in outstanding balances (I have taken the liberty of bold facing data that seemed particularly important to note):

• The percentage of mortgages that were current and performing remained unchanged from the previous quarter at 87.4 percent of the total servicing portfolio, indicating no change in overall credit quality. However, foreclosures in process, up 6 percent since the prior quarter and 12 percent from one year ago, reached a new high of 3.6 percent of the total serviced portfolio
• Seriously delinquent mortgages—mortgages that were 60 or more days delinquent or delinquent loans to bankrupt borrowers—declined across all risk categories to 5.8 percent of the serviced portfolio overall. Although elevated from historic norms, this third consecutive quarterly decline in serious delinquencies brought them to their lowest level in more than a year.
• Home retention activity included 233,853 permanent modifications during the third quarter, a 12.5 percent decrease from the previous quarter.
• More than 88 percent of modifications implemented during the quarter decreased monthly principal and interest payments. More than 54 percent of those modifications reduced payments by 20 percent or more. On average, modifications during the second quarter reduced borrowers’ monthly principal and interest payments by $396. Home Affordable Modification Program (HAMP) modifications implemented during the quarter reduced payments by an average of $585.
• Government-guaranteed mortgages performed worse than the overall portfolio. While decreasing slightly from the previous quarter, the percentage of current and performing government-guaranteed mortgages increased 2.6 percent from a year ago. Of those mortgages, 85.1 percent were current and performing at the end of the third quarter . Increased origination of these loans continued in the third quarter, with government-guaranteed mortgages composing 19 percent of the total portfolio.
• Mortgages serviced for Fannie Mae and Freddie Mac (GSEs) performed better than the overall portfolio because of their higher concentration of prime mortgages. Of the GSE mortgages, 92.3 percent were current and performing at the end of the third quarter . Loans serviced for the two GSEs made up 61 percent of the total portfolio.
• Servicers implemented 470,321 new home retention actions—loan modifications, trial-period plans, and payment plans—during the quarter. This represents a 17.0 percent decline from the previous quarter. HAMP modifications decreased by 45.7 percent during the quarter while other modifications increased by 10.1 percent. New HAMP trial plans decreased by 33.2 percent, and other trial-period plans decreased 21.0 percent from the previous quarters (see table 1). Servicers report that this decline resulted from requirements to obtain, verify, and analyze borrower income before beginning a trial period plan and the falling number of borrowers who are eligible for existing modification programs.
• ..servicers capitalized missed payments and fees in 87.5 percent of all modifications made during the third quarter and reduced interest rates in 86.2 percent of modifications. Term extensions were used in 57.4 percent of all modifications, principal deferrals in 10.1 percent, and principal reductions in 4.5 percent. Principal deferral was used in 24.6 percent of HAMP modifications, while principal reduction was used in 10.2 percent of the HAMP modifications
• Overall, servicers reduced principal and interest payments in 88.2 percent of all loan modifications made during the quarter, and they reduced payments by 20 percent or more in 54.1 percent of those modifications. As in previous quarters, nearly all HAMP modifications implemented during the third quarter reduced borrower principal and interest payments, and 76.0 percent reduced monthly payments by 20 percent or more.
• Servicers modified 1,506,025 loans from the beginning of 2008 through the second quarter of 2010. At the end of the third quarter of 2010, 48.0 percent of these modifications remained current or were paid off. Another 10.2 percent were 30 to 59 days delinquent. Almost 24 percent of the modifications were seriously delinquent, 9.4 percent were in the process of foreclosure, and 4.2 percent had completed the foreclosure process
• 58.9 percent of modifications that reduced payments by 10 percent or more were current and performing, compared with the 33.4 percent of modifications that reduced payments by less than 10 percent.
•  More recent modifications have performed better than earlier modifications every quarter since the end of the first quarter of 2009, though the rate of improvement appears to be moderating. At 6 months after modification, 20.2 percent of the modifications made in the fourth quarter of 2009 were seriously delinquent compared with 33.5 percent of the modifications made during the second quarter of 2009
• HAMP modifications performed better than other modifications implemented during the same periods at the end of the third quarter of 2010. At 6 months after modification, the re-default rate for HAMP modifications, measured as 60 or more days delinquent at 6 months after the modification, was about half that of other modifications for loans modified during the fourth quarter 2009 and first quarter 2010.
• After 6 months,14.6 percent of modifications implemented since the second quarter of 2009 that decreased monthly payments by 20 percent or more were seriously delinquent. In contrast, 28.1 percent of modifications that left payments unchanged and 42.6 percent of modifications that increased payments were seriously delinquent.
• Newly initiated foreclosures increased 31.2 percent from the previous quarter and 3.7 percent from a year ago, reflecting the large number of seriously delinquent mortgages and loans in process of foreclosure progressing toward foreclosure sale. Foreclosures in process increased 4.5 percent from the previous quarter and 10.1 percent from a year ago. More than 1.2 million mortgages were in the process of foreclosure at the end of the third quarter of 2010.
• Since January 2008, national banks have recognized $53.4 billion in losses from home equity portfolios according to the federal financial call report, more than 11 times the losses recognized over the previous five year period. Thrifts recognized more than $4.9 billion in home equity losses during that same period.

Originally created and posted on the Oregon Housing Blog.