Location: New York
Author: RiskCenter Staff
Date: Monday, June 2, 2008
Net charge-offs on mortgage loans secured by one- to four-family residential properties increased 640 percent from $889 million in the first quarter of 2007 to more than $6.58 billion last quarter, the Federal Deposit Insurance Corporation reported last week in its Quarterly Banking Profile.
First-quarter gross charge-offs totaled $6.88 billion, up 572 percent from $1.02 billion a year earlier. Dollar recoveries increased but the recovery rate on these written down mortgages fell to 4.25 percent in the first quarter from a rate of 13.1 percent in the same period last year.
Late mortgage payments also rose year over year. Residential mortgages that were one or two payments late (30-89 days past due) totaled $50.6 billion, up 68.1 percent from $30.1 billion in first-quarter 2007. Loans that were 90 or more days past due increased 47.4 percent to $14.3 billion from $9.7 billion a year earlier. Loans in nonaccrual status (no longer collecting interest) totaled $47.6 billion at the end of March, jumping 175 percent from $17.3 billion at the end of March 2007.
The FDIC reports that $1.78 billion in mortgage loans were restructured during the quarter. The agency has not reported this before or does not have the data available from previous quarters for the sake of comparison.
FDIC-insured institutions held residential mortgage assets, secured by one- to four-family properties, of $2.84 trillion at the end of March, up 3.6 percent from $2.74 trillion at the end of March 2007.
Source: http://www.creditandcollectionsworld.com/
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