FHFA: Seriously Delinquent GSE Loans at Lowest Level Since 2008

Sorohan, Mike msorohan@mba.org

January 03, 2017

The Federal Housing Finance Agency reported the serious delinquency rate for mortgages owned or guaranteed by Fannie Mae and Freddie Mac reached the lowest level since June 2008.

The government-sponsored enterprises' serious delinquency rate fell to 1.16 percent at the end of the third quarter, the report said (https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FPR_3Q2016.pdf).

Overall, the GSEs completed 46,390 foreclosure prevention actions in the third quarter, bringing the total number of foreclosure prevention actions to more than 3.7 million since the start of the conservatorships in September 2008, of which 1.993 million represented permanent loan mofidications.

Other key data:

--60+ days delinquent loans declined another 3 percent to 421,765 at the end of the third quarter, also the lowest level since 2008.
--Nearly one-third of the modifications during the quarter reduced borrowers' monthly payments by more than 30 percent.
--Fannie Mae and Freddie Mac's REO inventory declined by 9 percent in the third quarter to 52,891 as property dispositions continued to outpace acquisitions.
--The share of modifications with principal forbearance remained at 19 percent. Modifications with extend-term only accounted for 44 percent of all loan modifications in the third quarter due to improved house prices and a declining Home Affordable Modification Program-eligible population.
--21 percent of loans modified in third quarter 2015 had missed two or more payments, one year after modification.
--6,167 completed short sales and deeds-in-lieu took place, bringing the total to 660,651 since the conservatorships began.
--The serious delinquency rate fell to 1.2 percent at the end of the third quarter, the lowest level since June 2008. This compared with 4.4 percent for Federal Housing Administration loans, 2.3 percent for Veterans Affairs loans and 3.0 percent for all loans.
--Foreclosure starts decreased by 7 percent to 51,376 while third-party and foreclosure sales fell 9 percent to 21,293 in the third quarter.

Last month, Fannie Mae and Freddie Mac announced a new Flex Modification Program at the direction of the Federal Housing Finance Agency. The Flex Modification leverages components of HAMP, which expires at the end of this year, and the Standard and Streamlined Modifications, which will be replaced by the new program on October 1, 2017.

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