About 93.2% of the mortgages serviced by eight of the largest U.S. mortgage servicers were current and performing at the end of the quarter – compared with 93.0% at the end of the third quarter and 91.8% at the end of the fourth quarter of 2013 – according to the Office of the Comptroller of the Currency's (OCC) quarterly report on mortgage performance.
The report tracks the performance of about 45% of all first-lien residential mortgages outstanding in the U.S. As of the end of the fourth quarter, those approximately 23.1 million loans represented about $3.9 trillion in unpaid principal balance.
About 2.4% of the loans tracked were 30 to 59 days past due – a decrease of about 9.4% compared to the fourth quarter of 2013.
About 3.1% of the loans were 60-plus days past due or held by bankrupt borrowers whose payments were 30 days or more past due – a decrease of about 12.2% compared to a year earlier.
Foreclosure activity among the reporting servicers also continued to decline. The number of mortgages in the process of foreclosure at the end of the fourth quarter fell to 315,922, a decrease of 39.7% from a year earlier.
The percentage of mortgages that were in the process of foreclosure at the end of the fourth quarter was 1.4%, according to the report.
Servicers initiated 75,395 new foreclosures during the quarter, a decrease of 39.4% compared to the fourth quarter of 2013.
There were about 39,331 completed foreclosures during the fourth quarter, down 35.3% from a year earlier. The OCC notes that improved economic conditions and foreclosure prevention assistance contributed to the decline in foreclosure activity.
Servicers implemented 195,577 home retention actions (i.e., modifications, trial-period plan and shorter-term payment plans) during the quarter compared with 49,749 home forfeiture actions (foreclosures, short sales and deeds-in-lieu). This means that only one in four foreclosure starts actually ended in foreclosure.
The number of home retention actions implemented by servicers decreased 19.5% from a year earlier.
More than 88% of the modifications processed during the quarter included reduced monthly principal and interest payments. About 52.2% of modifications reduced payments by 20% or more.
To read the full report, click here.