WASHINGTON — The overall level of current and performing mortgage loans fell slightly in the second quarter as early stage delinquencies ticked up, according to the latest mortgage metrics report.
The report, released Thursday by the Office of the Comptroller of the Currency, showed 88% of the 32.7 million mortgage loans held by national banks and federal thrifts were current and performing at the end of the second quarter, down from 88.6% in the previous quarter, but up from 87.3% a year earlier.
The OCC blamed the quarterly change on a seasonal increase in mortgages that are 30 to 59 days past due, which now represent 3% of all mortgages, a slight increase from the previous quarter. The slight increase also reflects a sluggish economy and elevated unemployment.
Delinquencies are typically at their low point in the first quarter, and tend to increase throughout the rest of the year, said Bruce Krueger, the OCC's lead mortgage expert.
"We're kind of right in line with what we normally see as the increase between the first and the second quarter," Krueger said on a conference call with reporters Thursday.
Still, he acknowledged that other groups who monitor and report on mortgage delinquencies on a seasonally adjusted basis have noted that the increase is slightly higher than they might expect between those quarters. It's not something to be overly worried about, Krueger said, but the OCC is closely monitoring the third quarter data.
"This is certainly a better situation out there than there was a year ago," he said. "Now the question is, and what we will continue to monitor, is this increase in the second quarter something that's more than just seasonal."
The percentage of seriously delinquent mortgages also increased slightly from the previous quarter, to 4.9% of the total portfolio, after decreasing for five consecutive quarters. But both early stage and serious delinquencies increased from a year earlier.
The percentage of mortgages in the process of foreclosure remained steady at 4%. Although completed foreclosures decreased by more than 30% from a year earlier, the OCC said they expect foreclosures to continue to increase each quarter as foreclosures "work through the process and alternatives to foreclosure are exhausted."
Overall mortgage modifications also declined 18% from the previous quarter, despite a 31.6% increase in modifications under the government's Home Affordable Modification Program.
At the end of the first quarter of 2011, servicers had modified more than two million mortgage loans since the beginning of 2008. As of the end of the second quarter, 51.3% of those mortgages remained current or had been paid off, 9.2% were in early stage delinquency, and 18.2% were seriously delinquent. More than 10% were in the process of foreclosure.
The report covers about 63% of all first-lien mortgages in the United States, worth $5.7 trillion in outstanding balances.