Delinquency and foreclosures on bank-serviced mortgages continued to show quarterly improvement, and the servicing portfolios of big banks continued to diminish.
On closed-end first-lien mortgages and home-equity loans serviced by banks, delinquency of at least 30 days, including foreclosures in process, was 4.6 percent as of the second-quarter 2017.
That was worse than 4.4 percent in the preceding three-month period. But the rate has improved from 5.3 percent during the same three months last year.
The Office of the Comptroller of the Currency provided the details and more in the OCC Mortgage Metrics Report Second Quarter 2017.
The regulator based its findings on data from seven national banks: Bank of America, Citibank, HSBC, JPMorgan Chase, PNC, U.S. Bank and Wells Fargo.
The seven banks
serviced 18.955 million mortgages with an aggregate unpaid principal balance of $3.363 trillion as of the second-quarter 2017. That works out to around 34 percent of all residential debt outstanding.
Reflected in the non-current rate was an 0.6 percent foreclosures-in-process rate, down from 0.7 percent in the first quarter and 0.8 percent in the second-quarter 2016.
Including the 36,000 foreclosures that were newly initiated during the second quarter, there were
83,500 foreclosures started during the first half of this year, far fewer than the 107,600 that had been initiated through mid-2016.
The second-quarter 2017 saw 21,000 foreclosures completed, fewer than 23,700 three months earlier. The year-to-date total
was 44,700, less than the 55,000 total for the first-half 2016.
Servicing at the seven largest banks has subsided each quarter since at least the second-quarter 2015, when the collective portfolios stood at 22,116 mortgages for $3.760 trillion based on the oldest data in the report.
Prime mortgages — conforming or jumbo loans eligible for standard programs and pricing — accounted for 90 percent of all loans serviced, within the narrow range in place since at least the third-quarter 2016, when risk category definitions were changed.
The share of mortgages serviced that were classified as Alt-A — loans to prime borrowers that don’t satisfy the criteria for conforming or jumbo programs — was 2 percent.
Subprime share — the share of loans to borrowers with weakened credit history, reduced repayment capacity or incomplete credit history — was 3 percent, and the remaining 5 percent was classified as other.
