Magazine article American Banker

New Foreclosures Likely to Remain Elevated, OCC Says

Magazine article American Banker

New Foreclosures Likely to Remain Elevated, OCC Says

Article excerpt

Byline: Kate Davidson

WASHINGTON a The number of new foreclosures increased 21.1% in the third quarter as mortgage servicers lifted voluntary moratoria implemented late last year, according to a report released Wednesday by the Office of the Comptroller of the Currency.

Servicers exhausted foreclosure alternatives for the large inventory of seriously delinquent loans that were working their way through the loss mitigation process, leading to the quarterly spike, according to the OCC's quarterly mortgage metrics report.

Bruce Krueger, the agency's lead mortgage expert, said a decrease in the number of seriously delinquent loans in the fourth quarter of 2010 and the first quarter of this year led to a drop in new foreclosure actions in the second quarter. That made the third-quarter increase seem more dramatic, Krueger said.

"While it was a 21% uptick, it's really getting back into the range it was prior to the second quarter," he said.

Servicers initiated 347,726 foreclosures in the third quarter, compared to 287,162 in the second quarter, 312,235 in the first quarter, and 355,945 in the fourth quarter.

Although delinquencies remained stable from the previous quarter, and even declined from a year earlier, they still remain elevated compared to historical levels, Krueger said.

Given the large overhang of seriously delinquent mortgages a loans that are 60 or more days past due a Kruger said he expects new foreclosures to remain in the current range through most of 2012.

"I would expect that to continue going forward, so long as we have this large pipeline of seriously delinquent mortgages out there," he said. …

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