OCC says U.S. bank mortgage performance stays stable in first quarter
Mortgage performance in the federal banking system remains broadly steady through March 31, 2026, with nearly all first-lien loans current at the end of the quarter. The data also shows foreclosure starts rise from the prior quarter while loan modifications increase, pointing to continued servicing activity across a portfolio covering about $2.6 trillion in principal balances.
Highlights
- OCC reports 97.7 percent of covered first-quarter 2026 mortgages are current and performing, marginally above 97.6 percent in 2025.
- Servicers initiate 7,818 new foreclosures in Q1 2026, up from the previous quarter but down year-on-year, and complete 6,308 modifications, up 7.1 percent quarter-over-quarter.
- First-lien mortgages in the OCC report represent about 10.2 million loans and $2.6 trillion in balances, covering 19.1 percent of total U.S. mortgage debt.
First-quarter mortgage metrics update
As reported by the Office of the Comptroller of the Currency, 97.7 percent of mortgages covered by its first-quarter 2026 report are current and performing at the end of the period, up slightly from 97.6 percent in 2025.The share of seriously delinquent mortgages, defined as loans 60 or more days past due and mortgages held by bankrupt borrowers whose payments are 30 or more days past due, remains unchanged from the first quarter of 2025.
Servicers initiate 7,818 new foreclosures in the first quarter of 2026, an increase from the previous quarter but a decrease from a year earlier. They also complete 6,308 modifications during the quarter, up 7.1 percent from 5,888 in the prior quarter.
Of those completed modifications, 6,002, or 95.1 percent, are combination modifications that include multiple actions aimed at improving affordability and loan sustainability, such as an interest rate reduction and a term extension.
Scale of coverage and sector implications
The first-lien mortgages included in the quarterly OCC report account for about 19.1 percent of all residential mortgage debt outstanding in the U.S., representing roughly 10.2 million loans.Those loans total about $2.6 trillion in principal balances, making the dataset a significant indicator for mortgage servicing conditions in the banking sector. The figures suggest overall payment performance remains resilient even as servicers continue to manage foreclosures and borrower relief actions.
Oppenheimer’s downgrade of several major U.S. investment banks highlighted growing late-cycle valuation risks across parts of the financial sector. In our earlier article, we noted the firm urged investors to shift exposure away from large-cap investment banks toward select commercial banks and alternative asset managers, arguing private-credit fears were becoming overdone.
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