In a March 27 report on first-lien mortgages, the Office of the Comptroller of the Currency (OCC) likewise announced that in-process residential foreclosures had fallen below one million at the end of 2012, the lowest number since June 2009. In fact, nationwide, servicers initiated just 156,773 foreclosures in the fourth quarter. So what triggered the steep decline? The OCC attributes the drop to "strengthening economic conditions, the ongoing effects of both home retention efforts and home forfeiture actions, and servicing transfers to institutions outside the federal banking system." It is the last part of the sentence that deserves your attention: Yes, defaulted loans are being transferred outside the federal banking system at a remarkable pace, as non-depository servicers grab an increasing share of the mortgage service market. By way of example, the recent purchase by Quicken Loans of $34 billion in MSR's from Ally will result in a further drop in the OCC's foreclosure stats. This follows Ally's previously-announced sale of $90 billion in MSR's to Ocwen.