Citing a rise in missed payments on affordable home loans, the Office of the Comptroller of the Currency on Wednesday recommended ways national banks can better manage these types of mortgages.

The agency, in an advisory letter sent to all national banks, recommended extensive pre-purchase counseling for borrowers, rapid-response programs that contact borrowers within 30 days of a missed payment, and limits on loans without private mortgage insurance.

The agency also recommended establishing additional reserves to cover missed payments and requiring automated payments from borrowers' bank accounts.

If low-income borrowers are unable to qualify for private mortgage insurance, as is often the case, the OCC suggested banks get master insurance policies for groups of loans.

Bankers complained that the cost of implementing the recommendations could tighten already slim profit margins on affordable home loans.

"The economics are easier said than done," said Catherine P. Bessant, president of community investment at NationsBank Corp. "These are very people- and time-intensive suggestions."

Comptroller of the Currency Eugene A. Ludwig first alerted banks in April to potential problems in their affordable-loan portfolios.

The new advisory letter emphasized that affordable-mortgage portfolios remain generally profitable and that losses are "almost nonexistent." However, rising delinquency rates at some banks new to affordable home lending have raised concerns.

Delinquency rates on affordable home loans averaged 4% in the first half of 1996 compared with 3% for residential real estate loans overall, according to an OCC survey of 82 banks.

However, a follow-up survey of 13 national banks with high levels of affordable mortgages found a few experienced a 100 basis point jump in delinquency rates during the second half of 1996.

"This delinquency rate must be taken seriously," Mr. Ludwig said Wednesday at the Affordable Housing Symposium in Philadelphia.

However, trying to prevent any hint of crisis, he noted that low-income customers are paying off the large majority of these loans and that these lending programs are not in jeopardy.

"By encouraging banks to profit from the experiences of others in this field, we can simultaneously promote the growth of affordable-mortgage programs, the health of our communities, and the safety and soundness of the banking system," Mr. Ludwig said.

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