TopMortgage Compliance Update (1)
  June 24, 2010
                                          OCC and OTS: Mortgage Metrics Report  

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On June 23, 2010, the Office of the Controller of the Currency (OCC) and the Office of Thrift Supervision (OTS) jointly issued their Mortgage Metrics Report (Report) for the first quarter 2010. The Report provides performance data on first-lien residential mortgages serviced by national banks and federally regulated thrifts. These mortgages comprise more than 64% of all mortgages outstanding in the United States.

Among the disclosed statistics, the Report showed that approximately 41% of loan modifications made in second quarter of 2009 were 60 days or more delinquent nine (9) months after the modification, and the failure rate within nine (9) months was almost 52% in the fourth quarter of 2008.

The Report further discloses that nearly 25% of loan modifications made in the fourth quarter of 2009 were 30 days or more delinquent after three (3) months and Home Affordable Modification Program (HAMP) recidivism rate was 17% in the same period.

Although the Report's Key Findings, Mortgage Performance, Home Retention Actions: Loan Modifications, Trial Period Plans, and Payment Plans, Modified Loan Performance, and Foreclosures and Other Home Forfeiture Actions give varying results, both positive and negative -- as the saying goes, the "devil is in the details!"

  • Delinquency rates dropped in the first quarter of 2010, with improvement in all categories of mortgages-prime, Alt-A, and subprime.
  • The number of foreclosures increased substantially, including new foreclosures, foreclosures in process, and completed foreclosures.
  • The number of loan modifications and other home retention actions also increased.
  • Re-default rates for modified mortgages remain high.
  • Recent "vintages" (i.e., 2009 loan modifications) performed better.
Chart-1 Mortgage Metrics-3.10
Serious delinquencies declined across all risk categories during the first quarter of 2010. Subprime mortgages recorded the most significant improvement, while prime loans had the least improvement. Overall, there were 2,210,495 seriously delinquent mortgages at the end of the first quarter, 7.5 percent less than the prior quarter but 36 percent more than a year ago.
Chart-2 Mortgage Metric 3.10
Early stage delinquencies-mortgages 30-59 days delinquent-significantly declined across all risk categories during the first quarter. Overall, early-stage delinquencies, at 2.8 percent, were 17.7 percent less than the prior quarter and 3.6 percent less than a year ago.
Chart-3 Mortgage Metric 3.10
During the first quarter of 2010, servicers implemented 629,678 new home retention actions: loan modifications, trial period plans, and payment plans. This 5.4 percent increase in home retention actions from the prior quarter was driven by the 79,301 increase in HAMP modifications and 25,732 increase in other modifications, which more than offset the 74,091 decrease in new trial period plans. In total, servicers initiated 2,731,408 home retention actions over the last five quarters.

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Mortgage Metrics Report: Disclosure of National Bank and Federal Thrift Mortgage Loan Data, First Quarter 2010

Issued 06/23/10

Suite of Services and Specializations

Mortgage Compliance                 Compliance Administration

Defaults and Claims Reviews        Forensic Mortgage Audit

Mortgage Defaults Task Force       Mortgage Quality Control

FHA Examinations               State and Federal Examinations

Mortgage Due Diligence     FNMA|FHLMC|GNMA Applications

Legal Reviews & Remedies          Loss Mitigation Compliance

Sarbanes-Oxley Compliance           HMDA & CRA Processing

Mortgage Fraud Audit                   Disaster Recovery Plans

CORE Compliance Matrix                         Statutory Licensing

Business Development                Information Security Plans

IT & IS Compliance                                     RESPA-AfBAs

Lenders Compliance Group is the first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance and offering a full suite of hands-on and automated services in residential mortgage banking.

We are pioneers in outsourcing solutions for mortgage compliance.

This communication is sent to our valued clients and colleagues, who regularly receive our Advisory Bulletins, Mortgage Compliance Updates,  Compliance Alerts, and News and Views.

These publications are free to subscribers. Information contained herein is not intended to be and is not a source of legal advice.

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