The largest banks and federal savings associations created a 21.1 percent increase in new foreclosures during the third quarter when they lifted voluntary moratoria implemented in late 2010.
The Office of the Comptroller of the Currency reported yesterday that the increase in new foreclosures and the increase in average time required to complete foreclosures sales has resulted in the number of foreclosures in process increasing by 4.1 percent, or 1,327,077 loans.
During the quarter, services also exhausted alternatives to foreclosure for the large inventory of seriously delinquent mortgages working through the loss mitigation process. The increase in new foreclosures and the increase in average time required to complete foreclosure, the OCC said.
The OCC said mortgage servicers “lifted voluntarily moratoria implemented in late 2010,” when the robo-signing controversy initially came to light. Newly initiated foreclosures, however, declined 11.8 percent from third quarter 2010.
“This quarterly increase results from the large number of seriously delinquent mortgages working their way through the loss mitigation process toward foreclosure. The number of foreclosures in process increased 0.5 percent from the previous quarter and 7.6 percent from a year earlier as the length of time required to complete foreclosure lengthens,” the agency said.
Overall, the performance of first-lien mortgages serviced by large national banks and federal savings association was stable, but delinquencies remained elevated during the third quarter of 2011.
At the end of the third quarter of 2011, 88 percent of the 32.4 million loans in the portfolio were current and performing at the end of the third quarter, almost unchanged from the previous quarter. The percentages of mortgages that were 30-to-59 days delinquent and mortgages that were seriously delinquent (loans 60 or more days delinquent or delinquent mortgages to bankrupt borrowers) did not change from the previous quarter. However, both categories of delinquencies have declined from a year earlier.
The OCC report includes about 62 percent, or 32.4 million, of all first-lien mortgages in the U.S. worth $5.6 trillion in outstanding balances.