OCC and OTS Mortgage Metrics Report

Disclosure of National Bank and Federal Thrift Mortgage Loan Data
January – June 2008
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The OCC and OTS Mortgage Metrics Report presents performance data on first lien residential mortgages serviced by national banks and federally regulated thrifts, focusing on delinquencies, loss mitigation actions, and foreclosures.

This is the first joint report by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) and allows the agencies to present a more comprehensive picture of mortgage performance, loss mitigation, and foreclosures among federally regulated banks and thrifts. The combined report reflects the activities of many of the industry's largest mortgage servicers, and incorporates information on all mortgages serviced, not just subprime. The report presents loan-level data on each of the 34.7 million loans in this portfolio; none of the data is estimated.

The decision to issue a joint report also extends the effort of creating a common reporting framework by using standardized reporting terms and data elements. In particular, the report uses standard definitions for prime, Alt-A, and subprime mortgages relying on credit score ranges that are common across the industry. A common reporting framework allows for better comparison across the industry and over time. A joint report also reduces any possible confusion created by two separate reports that cover common ground but were issued independently at separate times.

The agencies collected data from the nine national banks (banks)¹ and the five savings associations (thrifts)² with the largest mortgage servicing portfolios. At the end of June 2008, the 34.7 million first lien mortgage loans serviced by these institutions totaled more than $6.1 trillion in principal balances. The combined servicing portfolio constituted more than 90 percent of all mortgages serviced by national banks and thrifts, and approximately 60 percent of all mortgages outstanding in the United States. Approximately 88 percent of the mortgages in the total servicing portfolio were held by third parties via securitization by government-sponsored enterprises and other financial institutions.

This report includes amended data for the first quarter of 2008 that has been resubmitted by the participating banks and thrifts, reflecting the continuing effort of the agencies and the lenders to improve the data collection effort.

Key findings of this report include:

• New loan modifications increased by more than 80 percent from January to June and increased by 56 percent from the first to second quarter. By comparison, new payment plans grew only 8 percent from January to June 2008, and increased just more than 2.7 percent from the first to second quarter. As a result, the mix of loss mitigation shifted toward loan modifications from the first to second quarter with the share of loan modifications increasing from 34.5 percent to 44.5 percent.

• More than nine out of 10 mortgages remain current. However, credit quality declined during the second quarter across all risk categories. The overall percentage of current and performing mortgages in the combined portfolio declined from 93.35 percent at the end of the first quarter to 92.61 percent at the end of the second quarter.

• There were increases in early stage delinquencies (30-59 days past due) and seriously delinquent mortgages, defined as mortgages that are 60 or more days past due plus loans to bankrupt borrowers who are 30 or more days past due. Foreclosures also increased in the second quarter.

• New loss mitigation actions increased more quickly than new foreclosures during the second quarter. Overall, new loss mitigation actions relative to new foreclosures averaged more than 87 percent during the second quarter, about 12 percentage points higher than the first quarter.