WASHINGTON - Borrowers are making their mortgage payments on time more frequently compared to a year ago, but delinquency rates remain elevated as government efforts to help homeowners fail to keep pace with job losses that push more homeowners toward foreclosure.
At the end of the second quarter of this year, 88.0 percent of U.S. mortgages were current, a slight deterioration from 88.6 percent in the previous quarter but an improvement from 87.3 percent a year ago, according to a report from the Office of the Comptroller of the Currency.
The second quarter reading marks an improvement from the percentage of loans that were current and performing by the end the 2007-09 financial crisis, according to the OCC. The percentage of current loans fell for seven consecutive quarters leading up to the end of 2009, when 86.4 percent were current at that time.
Seriously delinquent mortgages that are 60 days or more past due rose to 4.9 percent in the quarter through June 30 from 4.8 percent the previous period, following five quarters of improvement. Seriously delinquent loans were down from 6.1 percent a year earlier.
Bruce Krueger, a mortgage official at the OCC, said seasonal factors may have been the reason for the mortgage delinquencies picking up from the first quarter and might not be directly related to weakness in the economy.
He said delinquencies are often low in the first three months of the year and show a pattern of inching up by about 0.2 percent to 0.5 percent by the end of the second quarter.
"We're right in line with what we normally see as the increases in the first and second quarters," Krueger said. He cautioned that the OCC is paying close attention to the pick-up as the year proceeds to gauge if there are economic factors impacting delinquencies, such as high unemployment.
The number of borrowers involved in foreclosure proceedings increased by 0.9 percent during the quarter. However, first-time foreclosure filings on the loans decreased 8.0 percent from the first quarter to 287,145, the report said.
Regulators caution foreclosures remain high by historical standards.
Loans are being modified by servicers to make them more affordable through government programs and industry initiatives.
Servicers modified 2.08 million loans from the beginning of 2008 when the housing bubble burst through the end of the first quarter of 2011, the report noted. The modifications were not all successful, with 9.2 percent 30 to 59 days delinquent, and 18.2 percent "seriously delinquent" by the end of the second quarter.
The OCC survey covers 32.7 million loans, which have $5.7 trillion in principal balances. These figures represent 63 percent of outstanding U.S. mortgages.
(Reporting by Margaret Chadbourn, Editing by Andrea Ricci)
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