Comptroller of the Currency unveils new report on mortgage performanceMortgagePress.comOCC, John Dugan, The OCC Mortgage Metrics Report
The following are findings from a speech given by Comptroller of
the Currency John C. Dugan, delivered to the American
Securitization Forum on June 11.
The speech previews findings from an upcoming report from the
Office of the Comptroller of the Currency, "The OCC Mortgage
Metrics Report." The report presents findings from data submitted
on more than 23 million first mortgages held or serviced by the
nine largest national bank mortgage servicers. This portfolio of
loans represents 90 percent of all mortgages held or serviced by
national banks and about 40 percent of all mortgages across the
industry. The portfolio totals more than $3.8 trillion.
In February, the OCC began requiring banks to submit
comprehensive mortgage performance data each month from October
2007 forward. The requirement originated when the agency recognized
the need for more comprehensive and granular data at the same time
it recognized limitations in other reports and data sets available
throughout the industry. This report presents the initial findings
from October 2007 through March 2008.
This report differs from other reports in three basic ways.
First, it is comprehensive in that it reflects more than 40 percent
of the entire industry and includes both mortgage servicers as well
as mortgage holders. Second, the report is based on "loan-level"
data, where the agency collected 64 pieces of information on each
of the more than 23 million loans in the portfolio instead of just
responses to surveys. Loan-level data allows information to be
verified, analyzed in more rigorous ways, and will provide greater
reliability over time. Third, the report uses standardized terms
and definitions that allow terms like "sub-prime" to mean the same
thing from lender to lender, and from loan to loan.
The findings are preliminary and the OCC will continue to work
with banks to validate the information and improve the submission
process going forward.
Some of the significant findings that the Comptroller highlights
in the speech include:
• The overall mortgage servicing portfolio of the nine
banks reflects credit quality that is relatively satisfactory and
relatively stable. For example, the number of current and
performing loans remained at about 94 percent over the entire
six-month period. Serious delinquencies, which we define as
bankrupt borrowers who are 30 days delinquent and all delinquencies
greater than 60 days, increased just one tenth of a percentage
point during the period, from 2.1 percent to about 2.2 percent.
• As in other studies, our report confirms that
foreclosures in process are plainly on the rise, with the total
number increasing steadily and significantly through the reporting
period from 0.9 percent of the portfolio to 1.23 percent.
Interestingly, the number of new foreclosures has been quite
variable. While one month does not make a trend, new foreclosures
in March declined to 45,696, down 21 percent from January's high
and down about 4.5 percent from the start of the reporting period
last October.
• Although sub-prime mortgages made up less than 9 percent
of the portfolio, they accounted for 43 percent of all loss
mitigation actions at the end of March. Indeed, for these borrowers
in that month, total loss mitigation actions exceeded new
foreclosures proceedings by a margin of nearly 2 to 1.
For more information, visit www.occ.gov.
