More mortgage borrowers were able to make their monthly home loan payments in the fourth quarter of 2010 compared to previous quarters, according to the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
Of the 32.9 million home loans tracked by the OCC and OTS, 87.6 percent as of the last quarter of 2010 were current and being paid on time, the highest percentage reached since the April-June quarter in 2009.
The percentages of loans that were in default and seriously delinquent also dropped in the last quarter of 2010. Home loans in default by 30 days to 59 days, classified as early stage delinquencies by the banks, accounted for 3.1 percent of the total loan portfolio, a drop of 2.4 percent from the previous month and a decrease of 7.7 percent from a year ago.
More importantly, home loans in default by 60 days or more, classified as seriously delinquent mortgages, fell sharply by 24 percent to 5.4 percent from a year ago. This drop was also the fourth consecutive quarterly decrease. Analysts said the decrease was a result of mortgage modification efforts, the completion of foreclosure actions, and the drop in early stage delinquencies.
Among the kinds of mortgages, Fannie Mae and Freddie Mac home loans performed better than all the other kinds as 92.6 percent of all Fannie and Freddie mortgages were current at the end of 2010. This is significant as home loans from these government sponsored enterprises accounted for 61 percent of the total loan portfolio.
There are also good things happening in the federal government’s home modification program despite criticisms about its failure to help more distressed homeowners. In last year’s fourth quarter, almost 90 percent of mortgage modifications completed during the quarter reduced monthly payments, with more than half of modifications cutting monthly interest and principal payments by 20 percent or more.
The average reduction for all modifications in the October-December 2010 quarter was $414 while the average reduction for HAMP modifications was $587.
The states with the highest number of home loan modifications in the fourth quarter last year, consisting of HAMP modifications and other modifications were the following:
- California – 39,910
- Florida – 19,353
- Texas – 11,933
- Georgia – 10,930
- Illinois – 10,437
The states with the highest number of home loans modified and reduced by 20 percent or more were the following:
- California – 25,856
- Florida – 12,397
- Illinois – 6,241
- Texas – 5,449
- Georgia – 5,486
- New York – 5,322
It’s good to see that the number of completed modifications in Florida continues to be substantial compared to other states, as Florida has been following California in foreclosure charts.
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