New US foreclosures at lowest since crisis
Improving economic condition, alternatives to seizing homes are behind low figure
The number of new US foreclosures initiated in the fourth quarter of 2012 fell to the lowest level since officials began tracking them during the financial crisis, a government report said today.
Large US banks initiated 156,773 new foreclosures during the quarter, the lowest since the first quarter of 2008, as economic conditions improved and loan servicers continued to emphasise alternatives to seizing homes, the Office of the Comptroller of the Currency said.
Loans in the foreclosure process also dipped below 1 million at the end of 2012 for the first time since June 2009, the OCC said in its quarterly report, which looks at 29 million first-lien mortgages serviced by large national and federal savings banks.
"The overall performance of mortgages included in this report improved from last quarter and from a year earlier," the OCC said.
Regulators have been watching the way banks treat struggling borrowers, particularly after accusations that mortgage servicers took illegal shortcuts during the spike of home foreclosures following the 2007-2009 US financial crisis.
The Federal Reserve and the OCC reached settlements worth about $9.3 billion with 13 banks earlier this year to end probes into whether they had wrongly seized homes.
The OCC said loan modifications made during the quarter on average lowered borrowers' monthly principal and interest payments 25.9 per cent.
About 89 per cent of mortgages were current and performing at the end of 2012, up from 88 per cent in the same quarter a year earlier, the OCC said.