January 6th, 2014
Fannie Mae and Freddie Mac hit a new milestone for foreclosure prevention actions.
According to the U.S. Federal Housing Finance Agency's Foreclosure Prevention Report for the third quarter of 2013, the government-sponsored enterprises recently marked off their number of completed foreclosure prevention actions at 3 million total since the beginning of their conservatorship in 2008. These actions include loan modifications and repayment and forbearance plans as well as alternatives to foreclosure, such as a deed-in-lieu or short sale.
"Three million completed foreclosure prevention actions is a significant achievement," said FHFA Acting Director Edward DeMarco. "It represents real assistance to homeowners, improved stability for their communities, and has produced meaningful savings for taxpayers. I am grateful for the persistent effort of everyone at FHFA, Fannie Mae and Freddie Mac, who have contributed to reaching this milestone."
Of the 3 million homes saved from foreclosure, 2.5 million were homes that were kept by the owners through loan modifications and other actions. Meanwhile, 500,000 were kept out of foreclosure through short sales or deeds-in-lieu.
Other highlights of the report
In the third quarter of 2013, 51 percent of loan modifications cut the borrower's payments by 30 percent, and 31 percent of borrowers who received permanent loan modifications had some part of the outstanding balance forborne.
There was also a decline in foreclosure prevention actions in the third quarter, suggesting that fewer homeowners are requiring assistance to stay current on their home loans. Total home retention actions dropped from 87,675 in the second quarter to 74,879 in the third quarter. Short sales decreased to 21,803 from 24,656 and deeds-in-lieu fell to 4,194 from 4,757.
Loan modifications – including permanent modifications through the Home Affordable Modification Program – declined from 59,635 to 57,878. Repayment plans fell from 23,648 to 14,507 while forbearance plans were nearly cut down by half – 4,221 to 2,330. Charge-offs-in-lieu decreased from 171 to 164.
Fannie and Freddie mortgages also performed better during the third quarter. The number of seriously delinquent mortgages – those delinquent 90 days or more – declined from 783 in the second quarter to 724 in the third quarter. Foreclosure starts decreased from 125 to 117.