December 21, 2012 / 3:16 PM / 6 years ago

U.S. mortgage quality improves, but homeowners still struggle

WASHINGTON, Dec 21 (Reuters) - The U.S. housing market continues to show some signs of recovery as the quality of first-lien mortgages improved in the third quarter from a year earlier, but data suggests that some homeowners are still struggling to afford their monthly payments, according to a new government report.

The Office of the Comptroller of the Currency said on Friday that 88.6 percent of mortgages were current and performing at the end of the third quarter, compared with 88 percent a year earlier.

The quality of first-lien mortgages for the third quarter was only slightly less than the prior quarter, when 88.7 percent were current and performing.

The OCC said several factors had contributed to the improvement from 2011 to 2012, including “economic conditions, servicing transfers, and the ongoing effects of both home retention loan modification programs and home forfeiture actions.”

At the same time, however, the OCC said that past-due mortgages were on the rise. The percentage of mortgages that were 30 to 59 days past due rose 10.4 percent from the prior quarter to 3.1 percent. That marks a 3.6 percent increase from a year earlier.

Mortgages that are deemed “seriously delinquent,” or more than 60 days late, remained unchanged from the previous quarter at 4.4 percent, but are still down 10.8 percent from a year earlier.

“Foreclosure activity remains elevated as the large number of seriously delinquent mortgages and foreclosures in process work through foreclosure prevention and loss mitigation processes,” the OCC said.

The OCC’s report on Friday covers 29.8 million first-lien mortgages worth $5.1 trillion in outstanding balances, representing about 58 percent of all first-lien mortgages in the United States.

The full report can be found at

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