New foreclosures on homes initiated by banks fell considerably in the fourth quarter of 2011 because of an emphasis on programs designed to keep borrowers in their houses - and the effects of existing and anticipated settlements concerning foreclosure abuses.

The amount of new foreclosures initiated in the fourth quarter fell by 16% from the previous quarter and by 17.9% from a year earlier, according to a report by the Office of the Comptroller of the Currency (OCC).

"These reductions are attributable to servicers' ongoing emphasis on modifications and other loss mitigation programs, a declining number of seriously delinquent mortgages over the last year, and the effects of foreclosure settlements," the OCC said in the quarterly report.

How banks treat struggling borrowers has been under intense scrutiny since late 2010 from state and federal officials because of accusations that illegal shortcuts were taken in the years following the 2007-2009 financial crisis to speed up foreclosures.

Several large banks in April 2011 entered into a settlement with the OCC, the Federal Reserve and the now defunct Office of Thrift Supervision on steps to improve their foreclosure processes, such as providing borrowers with a single point of contact for questions.

In February, Bank of America, JPMorgan Chase & Co , Citigroup Inc, Wells Fargo and Ally Financial struck a $25 billion deal with state attorneys general and the Justice Department to settle allegations of foreclosure abuses.

The OCC Mortgage Metrics Report provides performance data on first-lien residential mortgages serviced by national banks and federally regulated thrifts. The mortgages in this portfolio make up about 60 percent of all mortgages outstanding in the U.S.

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