By Corbett B. Daly
WASHINGTON, June 23 (Reuters) - Delinquencies on U.S. home mortgages fell for the first time in more than two years, though the number of newly initiated foreclosures rose sharply in the the first quarter of this year, U.S. banking regulators said on Wednesday.
The total number of serious delinquencies fell 7.5 percent to 2.2 million, while the number of newly initiated foreclosures rose 18.6 percent to 370,856 in the first quarter, according to a report from the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Delinquencies are 36 percent higher than a year ago.
The percentage of current and performing mortgages rose to 87.3 percent at the end of the first quarter from 86.4, the first rise since the report was started in March 2008. That is 2.9 percent lower than the 89.8 percent rate in the first quarter of 2009.
The report also showed that more than half of all modified loans ended up redefaulting. The report said 57.1 percent of loans that had been modified for at least a year were 60 days or more past due.
The report by the U.S. Treasury Department units covers nearly 34 million loans totaling almost $6 trillion in principal balances and provides information on their performance through March.
The report defines “serious delinquencies” as those loans 60 days or more past due and loans delinquent to bankrupt borrowers.
The OCC and OTS Mortgage Metrics Report provides performance data on first-lien residential mortgages serviced by national banks and federally regulated thrifts. The report covers all types of first-lien mortgages serviced by most of the industry’s largest firm which collect mortgage payments, known as servicers.
The mortgages in this portfolio comprise more than 64 percent of all mortgages outstanding in the United States.
Without the help of government, state and private loan modification programs, many of the homes backed by these delinquent loans could go into foreclosure. Foreclosures are by far one of the biggest threats to the U.S. housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention.
Reporting by Corbett B. Daly; Editing by Chizu Nomiyama