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Consumers Catching Up on Late Mortgages

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While the housing market has been somewhat rocky in the last several months, there have generally been improvements, and that trend continued into the second quarter of the year.

The number of first-lien home loans nationwide that were current and performing through the end of the second quarter climbed to 88.7 percent, up from 88.1 percent on a year-over-year basis, according to the latest Mortgage Metrics Report issued quarterly by the U.S. Office of the Comptroller of the Currency. However, that rate was also down, though slightly, from the first quarter of 2012, when current and performing home loans made up 88.9 percent of the total number nationwide.

Of the number of late mortgages, just 2.8 percent were between 30 and 59 days late, a drop of 7.5 percent from the same period last year, but an increase of 12.1 percent from the first quarter, the report said. On the other hand, the number of home loans 60 days or more behind on payments slipped to the lowest levels observed in three years. In all, these mortgages made up 4.4 percent of late payments, down both 0.8 percent from the first quarter, and 9.2 percent on an annual basis.

While there were a number of factors that contributed to these improvements in the mortgage market on a year-over-year basis, if not a quarterly one, perhaps the largest was the fact that greater efforts to issue home loan modifications continued to pay off, the report said. In all, lenders, servicers and the federal government were able to successfully work in concert to begin 416,036 new retention actions between April and June, designed to keep consumers in their homes. That’s compared with just 302,636 new foreclosure proceedings.

There have been considerable efforts to improve the housing market in the past several months, and many of them involve broadening of qualifications for government initiatives. This includes the Home Affordable Modification Program, which is designed to help homeowners who owe more on their mortgages than their properties are worth. Specifically, HAMP modifications will allow them to alter the terms of their mortgages so that their monthly payments are more affordable. The initiative has been in place for some time now, but earlier versions of its programs were criticized for being too restrictive.

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