On February 13, the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS, and collectively with the OCC, the Agencies) announced an expansion of the scope of mortgage performance data gathered from national banks and thrifts to include additional information with respect to mortgage loan modifications. The Agencies began a joint reporting program with respect to mortgage performance in the summer of 2008.
The additional information will be included in the Agencies’ upcoming joint Mortgage Metrics Report, to be issued in March. Categories of loan modifications to be included in such report include the following: (i) modifications that increased borrowers’ monthly principal and interest payment; (ii) modifications that brought no change to payments; (iii) modifications that reduced payments by 10% or less; and (iv) modifications that reduced payments by more than 10%. With respect to loans that were modified in the first and second quarters of 2008, the upcoming report will include the percentage of modifications in each of the four categories that are 60 or more days past due at six months after modification.
Future joint reports will also show trends in the types of modifications undertaken by loan servicers. According to the related press release, this information will “help inform lenders and policymakers as to what type of modifications work, with a particular focus on the effect of significant changes in monthly payments.”