WASHINGTON — Foreclosures initiated by federally chartered banks and thrifts fell to a four-year low last quarter, the Office of the Comptroller of the Currency said Wednesday.

The OCC's Mortgage Metrics report said large institutions under the agency's watch started the foreclosure process in 156,773 cases during the last three months of 2012, the lowest level since early 2008, the onset of the mortgage meltdown. Completed foreclosures fell nearly 9% from a year earlier to 105,875.

The agency, which also reported a continued drop in delinquent mortgages, attributed the drop-off to the improving economy, foreclosure prevention efforts and suspensions of foreclosures in areas affected by Superstorm Sandy.

"Overall, you've got a very positive picture for borrowers, for investors and for the housing market," Bruce Krueger, the OCC's lead mortgage expert, said in a call with reporters.

The 367,169 in total retention actions were 20% lower than a year earlier and 4% lower than the previous quarter. Still, the OCC said home retention actions — such as modifications and altered payment plans — were twice the number of completed forfeiture-related actions, including foreclosures, short sales and deed-in-lieu-of-foreclosures.

Attempts to work out loans are expected to slow as federal programs to assist troubled borrowers, such as the Home Affordable Modification Program, approach their expiration.

"I do think the trends we are seeing in improved mortgage quality and reduction in foreclosures will continue," Krueger said. "There are going to be some aberrations but I think the long-term trends are positive."

By the end of 2012, more than 89% of the 29 million mortgages reviewed in the report were current compared with 88.6% in the third quarter and 88% a year earlier.

Mortgages that were less than two months past due fell more than 13% from a year earlier to 826,415. And mortgages that were "seriously" delinquent — meaning those more than 60 days past due — fell 18% from the previous year to 1.3 million, even though the total percentage of loans that were seriously delinquent remained flat for the third consecutive quarter.

In addition to a better economy and loss mitigation efforts, the OCC said the year-over-year decline in seriously delinquent mortgage also was partly due to financial institutions reviewed in the report transferring some of their loans to other servicers.

Servicers have modified nearly 2.9 million mortgages from 2008 through the third quarter of last year. More than 47% of those modified loans were current by the end of the fourth quarter. The remaining were either delinquent or in foreclosure.

"While delinquencies and performance of the portfolio overall is still off from what it was five years ago, we are definitely seeing a turn," Krueger said. "And we are moving in the right direction to get us back to where were five years ago."

The metrics report covers the eight largest servicers regulated by the OCC, representing 57% of all outstanding mortgages in the U.S. and totaling $4.9 trillion in principal balances.

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