OCC Reports Slight Decline in First-Lien Mortgage Performance in Q4

The Office of the Comptroller of the Currency (OCC) has reported a slight decline in the performance of first-lien mortgages in the federal banking system during Q4 of 2022 compared to Q3.

The OCC Mortgage Metrics Report, Fourth Quarter 2022, providing information on mortgage performance through December 31, 2022, showed that 97.1% of mortgages included in the report were current and performing at the end of the quarter, compared with 97.2% in Q3. There was an improvement compared to fourth quarter 2021, when just 96.4% of mortgages were current and performing.

The percentage of seriously delinquent mortgages–defined by the OCC as mortgages 60 or more days past due and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due–was 1.3% in Q4 of 2022, the same as the previous quarter, compared to 2.3% a year ago.

The OCC found that mortgage servicers initiated 9,166 new foreclosures in Q4 of 2022, a decrease from the prior quarter, but a higher volume than a year earlier. The new foreclosure volume in Q4 of 2022 is lower than pre-COVID-19 pandemic foreclosure volumes.

Mortgage servicers completed 11,419 loan modifications during Q4 of 2022, a 29.3% decrease from the previous quarter’s 16,160 loan modifications. Of the 11,419 loan mods completed during the quarter, 7,303, or 64%, reduced the loan’s pre-modification monthly payment, and 9,597 or 84%, were “combination modifications”—modifications that included multiple actions impacting 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 million loans totaling $2.7 trillion in principal balances.

Click here to access the full OCC Mortgage Metrics Report for Q4 of 2022.

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