OCC: Types of Modifications, by Risk Category

Types of Modifications, by Risk Category

First Quarter 2009

The types of risk modifications implemented in the first quarter of 2009 did not vary greatly among prime, Alt-A, and subprime borrowers. The following tables show the distribution of the types of modification actions by risk category. Because modifications may change more than one term, the number of features changed exceeds the number of modified loans in each risk category.

Numbers of Each Type of Modification by Risk Category in the First Quarter of 2009
	Prime	Alt-A	Subprime	Other	Total
Total Mortgages Modified	49,439	43,218	77,280	15,219	185,156
Capitalization	34,943	29,865	52,633	12,488	129,929
Rate Reduction	33,008	27,516	48,861	7,682	117,067
Rate Freeze	4,964	5,460	10,083	2,839	23,346
Term Extension	13,083	11,695	16,962	4,748	46,488
Principal Reduction	778	961	1,534	125	3,398
Principal Deferral	790	475	495	219	1,979
Unknown	3,990	3,088	4,612	1,272	12,962

The percentage of each type of change for modifications in each risk category roughly tracked the overall portfolio with the exception of modifications made to mortgages in the other risk category. Those modifications more often featured capitalization of missed fees and payments, a freeze in interest rates, and term extensions while featuring interest rate reductions less frequently.

Percentage of Each Type of Modification by Risk Category in the First Quarter of 2009
	Prime	Alt-A	Subprime	Other	Overall
Capitalization	70.7%	69.1%	68.1%	82.1%	70.2%
Rate Reduction	66.8%	63.7%	63.2%	50.5%	63.2%
Rate Freeze	10.0%	12.6%	13.0%	18.7%	12.6%
Term Extension	26.5%	27.1%	21.9%	31.2%	25.1%
Principal Reduction	1.6%	2.2%	2.0%	0.8%	1.8%
Principal Deferral	1.6%	1.1%	0.6%	1.4%	1.1%
Unknown	8.1%	7.1%	6.0%	8.4%	7.0%

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