Delinquencies and foreclosures on first-lien mortgages continued to climb in the first quarter of 2009, according to the most recent OCC and OTS Mortgage Metrics Report. The report also showed a similar rapid increase in loan modifications—in particular more sustainable loan modifications with lower monthly payments.


The report covers 64% of all first-lien U.S. mortgages—a total of 34 million loans totaling more than $6 trillion in principal balances from the beginning of 2008 to the end of the first quarter of 2009. The report does not include modifications made through the Obama administration’s Making Home Affordable Program, which was implemented after the reporting period ended, or changes to HOPE for Homeownership that were enacted in May.


Foreclosures were in process for almost845,000, or 2.5%, of all serviced loans—a 22% increase from the previous quarter and a 73% rise from the first quarter of 2008. The rate of serious delinquency (60 or more days past due or involving delinquent bankrupt borrowers) for prime mortgages shot up 20% in the quarter to 2.9% of all prime mortgages. Though the rate of increase of serious delinquencies slowed for alt-A and subprime loans, the overall rates in those categories stood much higher than for prime loans at 10% and 16.7%, respectively.


Servicers maintained a fervent pace in their attempts to stave off foreclosures through modifications. During the quarter, 185,156 loan modifications were processed, a 172% increase from the prior-year period. Six months after modification, 24% of mortgages that had monthly payments reduced by 20% or more were seriously delinquent, compared with 54% of mortgages with monthly payments left unchanged and 50% with higher monthly payments.


The report is available at



  Federal bank and thrift regulators issued an interim final rule, providing that mortgage loans modified under the Treasury Department’s Making Home Affordable Program (MHAP) will retain their risk weights applicable before modification. The rule would provide a common interagency capital treatment for mortgage loans modified under the MHAP, which was announced March 4. The rule would provide that mortgage loans risk weighted at 50% before modification would continue to be risk weighted at 50% as long as they continue to meet other applicable criteria.


The interim final rule, issued jointly by the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision, went into effect June 30. The interim final rule, Risk- Based Capital Guidelines; Capital Adequacy Guidelines; Capital Maintenance; Capital—Residential Mortgage Loans Modified Pursuant to the Making Home Affordable Program, is available at the Federal Register online at



  Federal bank and thrift regulators proposed revisions to regulations implementing the Community Reinvestment Act (CRA) that would require agencies to consider low-cost education loans provided to low-income borrowers when assessing a financial institution’s record of meeting community credit needs. The joint proposal by the Federal Reserve, the FDIC, the OCC and the OTS incorporates provisions of the recently enacted Higher Education Opportunity Act, which revised the CRA.


The proposal would incorporate into the CRA rules statutory language that allows the agencies, when assessing an institution’s record, to consider, as a factor, capital investments, loan participations, and other ventures by nonminority- and non-women-owned financial institutions in cooperation with minority- and women-owned institutions and low-income credit unions. This language codifies guidance in the Interagency Questions and Answers on Community Reinvestment, published Jan. 6.


The revisions, Community Reinvestment Act Regulations, are available at the Federal Register online at The comment period ended July 30.



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