U.S. Mortgages in Better Shape

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The U.S. Office of the Comptroller of the Currency (OCC) released its 2012 fourth-quarter mortgage metrics report this morning, outlining the performance of $4.7 trillion in principal mortgage balances. The OCC has been compiling the data since the first quarter of 2008.

At the end of the fourth quarter, 89.4% of mortgages were current and performing, up from 88.6% in the third quarter and 88% in the fourth quarter of 2011. Loans 30 to 59 days past due totaled 2.9%, down by 8.2% from the prior quarter and 6.1% for the fourth quarter a year earlier. Mortgages more than 60 days delinquent or held by bankrupt borrowers more than 30 days late were flat with the prior quarter at 4.4%, but down 11.6% from the fourth quarter of 2011.

The OCC attributes the drop to improving U.S. economic conditions, the effects of loan modifications, changes to home foreclosure actions and servicing transfers to institutions outside the jurisdiction of the OCC.

The agency noted that loan modifications that lowered homeowner payments by 10% or more performed better than smaller modifications. Nearly 55% of mortgages in that category were current or paid off, compared with just 36.5% of loans that received modifications to lower payments by less than 10%.

Loan modifications under the Home Affordable Modification Program (HAMP) performed even better, with nearly 62% of loans current or paid off. However, the number of HAMP loans fell 8.4% sequentially in the fourth quarter and were down 31.2% compared with the fourth quarter of 2011.

The OCC report is available here.