According to statistics released by the Office of Comptroller of the Currency (OCC), by the end of the second quarter, foreclosure starts were significantly down from the same time last year. Essentially, the rate in which foreclosures were being carried out dropped by 50.8 percent. The second quarter of 2013 witnessed approximately 150,592 homes enter the foreclosure process; whereas the second quarter a year earlier was about twice as much. The second quarter of this year represents the fewest foreclosures to occur in any quarter since 2008.
The data was presented to the public in the form of a Mortgage Metrics Report. Of particular interest, however, were the noted measures of delinquency on a national level. The OCC report acknowledged that most measures of delinquency experienced a drop in the second quarter of 2013.
The report provides performance data on first-lien residential mortgages that represent 52 percent of all those outstanding in the U.S; approximately 26.5 million loans with $4.5 trillion in unpaid principal balances.
The significant reduction in the rate of foreclosure starts has been attributed to strengthening economic conditions, aggressive foreclosure prevention tactics, regulatory action, and home forfeitures.
Decreased foreclosure activity is indicative of an encouraging trend within the housing sector. Subsequently, the report has identified the lowest level of foreclosure activity since 2008.
In addition to the drop in starts, the number of loans in the process of foreclosure at the end of the quarter declined 39.8 percent from the previous year to 744,369 loans. The number of completed foreclosures fell 22.2 percent year-over-year to 79,960.
While foreclosure prevention programs were down 9.8 percent from the first quarter, they were up in year-over-year comparisons. Servicer participation saw twice as many home retention practices implemented in the second quarter. There were 314,672 loan modifications, trial-period plans, and shorter term payment plans put in place during the quarter compared to 121,746 completed foreclosures, short sales, and deeds-in-lieu.
Loans modified in the most recent four quarters appear to be re-defaulting at materially lower rates than modifications completed in earlier quarters.