FHFA Reports on Enterprise Foreclosure Prevention Activity

by devteam December 23rd, 2010 | Share

The Federal HousingrnFinancing agency reported there have now been over a quarter million permanentrnmortgage loan modifications for Freddie Mac and Fannie Mae mortgages arrangedrnunder the Home Affordable Modification Program. rnWhile it was substantially below the 88,600 permanent modifications achievedrnduring Quarter II, 35,400 trial modifications were converted to permanentrnstatus in the third quarter, bringing the total to 260,000 over the 18 monthsrnsince the program began.  </p

FHFA’s Third Quarterrn2010 Foreclosure Prevention and Refinance Report issued on Monday includesrninformation on all of the foreclosure prevention efforts undertaken by the tworngovernment sponsored enterprises (Enterprises) Freddie Mac and Fannie Mae, includingrnHAMP, the Home Affordable Refinance Program (HARP,) and other foreclosure preventionrnactions.  </p

Completed foreclosurernprevention actions of all types were down 16 percent during the quarter to arntotal of 227,300.  Most of the decreaserncame from the numbers of modifications – down 14 percent from 171,176 torn146,507, mostly attributable to HAMP – and repayment plans which decreased fromrn46,353 to 33,964.   </p

Much of the backlogrnof borrowers who earlier seemed more or less stuck in HAMP trial modifications hasrnbeen cleared out in recent months.  Therernare now 88,197 Enterprise borrowers in trial status compared to 202,408 at thernend of the second quarter.  Under HARP arntotal of 479,894 mortgages have been refinanced since the Enterprises were putrninto federal conservatorship, a 26 percent increase from the cumulative numberrnat the end of Quarter Two.  There werern29,465 short sales completed by the Enterprises in Q3 compared to 29,375 in Q2.</p

Foreclosure startsrnand completed third-party and foreclosure sales increased 23 percent quarterrnover quarter with 339,000 starts and 138,100 sales. </p

Loans modified inrnthe first three quarters of 2010 are performing substantially better in thernfirst three months after modification than has been the experience in earlierrnperiods.  FHFA reports that less than 10rnpercent of loans modified in the last three quarters (beginning in Q4 2009) werern60 or more days delinquent three months after modification.  Prior to the fourth quarter last year thernthree month 30-day delinquency rate was in double digits – at 19 percent in Q3rn2009.  While only two quarters of data isrnavailable for the 60-day rate, it is equally impressive.  During the first three quarters of 2009 thernrate was over 30 percent.  In Q4 2009 andrnQ1 2010 it has averaged 15 percent.   </p

The short termrndelinquency rate in the Enterprise portfolios increased slightly from 2.19rnpercent to 2.28 percent during the third quarter but longer term delinquenciesrnwere down.  Loans that were 60+ days delinquentrndeclined for the third consecutive quarter. rnThere were nearly 110,000 fewer loans in that bucket, bringing therndelinquency rate down from 5.36 percent in the second quarter to 5.06 percent.  Days 90+ days overdue or in foreclosure wererndown from 4.58 percent to 4.26 percent.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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