Regulators Want More Loan Mod Data

The ""Office of the Comptroller of the Currency"":http://www.occ.treas.gov (OCC) and the ""Office of Thrift Supervision"":http://www.ots.treas.gov (OTS) are expanding the scope of the mortgage performance data gathered from national banks and thrifts to include additional information on the affordability and sustainability of loan modifications made in 2008.
The additional data will show how loan modifications changed the total amount of borrowers' monthly principal and interest payments in 2008 and help measure the effectiveness of lenders' loan modification efforts in making mortgages more sustainable and keeping borrowers in their homes, the agencies said.
The next edition of the agencies' joint Mortgage Metrics Report is scheduled for release next month and will categorize mortgage modifications by whether they increased monthly payments, left monthly payments unchanged, reduced payments by up to 10 percent, or eased homeowners' payments by more than 10 percent. The study will also show the percentage of modifications from the first half of last year, in each of the four categories, that are now 60 or more days past due.
Future reports covering all of 2008 and subsequent periods will also show trends in the types of modifications undertaken by loan servicers.
According to Comptroller of the Currency John C. Dugan, the new loan mod data requirements will help lenders and policymakers decipher which type of modifications work by highlighting the effect of significant changes in monthly payments. ""We continue to actively urge national banks to implement effective loss mitigation actions, including affordable and sustainable loan modifications, to prevent avoidable foreclosures and to mitigate their losses,"" Dugan said.
Dugan added, ""By bringing the same sort of standardized definitions and rigorous analysis to loan modification performance data that we have provided in our previous reports on mortgage metrics, lenders and policymakers can use this information to make loan modification programs more effective.""
The number of data elements requested from mortgage servicers has grown by about 50 percent - from approximately 60 elements per loan in June to now more than 90 elements per loan. The effort requires extensive work by mortgage servicers and regulators to review, validate, and present the data. In many cases, new data elements require changes to systems to capture and provide reliable information.
The OCC and OTS data collection now calls for up to 2.38 billion individual pieces of information each month on the loans serviced by the largest national banks and thrifts. As this additional data is collected, processed, and validated, the agencies said they plan to continue expanding the quarterly public reports to include the new information.
OTS Director John Reich described the expanded data collection effort as fulfilling a pledge. ""We have promised to continually improve this data collection-and-reporting program to ensure that the results are meaningful and useful in the ongoing effort to address the nation's foreclosure crisis,"" Reich said.