The Federal Housing Finance Agency [1] (FHFA) rolled out its fourth-quarter Foreclosure Prevention Report [2], which shows that Fannie Mae [3] and Freddie Mac [4] zipped up 67,569 foreclosure prevention actions in the fourth quarter of 2017. Across the board, that brings the number of homeowners helped to 4,040,258 since the start of the conservatorships in September 2008, the report says.
Of those actions, 3,357,722 helped struggling borrowers remain in their homes, including 2,150,946 permanent loan modifications. Nineteen percent of Q4 loan mods shaved borrowers’ monthly payments by more than 30 percent.
Forbearance plans vaulted to 24,935 during Q4—they totaled 1,212 in the previous quarter. FHFA attributes the notable leap to disaster-related forbearance available to homeowners affected by Hurricanes, Harvey, Irma, and Maria in Texas, Florida, and Puerto Rico. Various mortgage relief options are offered to homeowners affected by natural disasters, and numerous homeowners tapped into them after these three devastating storms.
The percentage of 60-plus-days delinquent loans rose from 1.32 percent to 1.65 percent at the end of Q4, the FHFA reports. The increase largely stems from the impact of those aforementioned hurricanes. Fannie and Freddie’s fourth-quarter 2017 REO inventory slid by 9 percent, the report said.
Some of the other foreclosure prevention metrics mentioned in the fourth-quarter report are as follows:
- Forty-two percent of the Q4 mods were principal forbearance modifications. Those with extend-term only also made up 42 percent of all loan modifications during the fourth quarter.
- In the short sales and deeds-in-lieu category, Fannie and Freddie completed 3,119 of them during Q4, bringing that total to 682,536 since the conservatorships started.
- The enterprises’ serious delinquency rate rose to 1.18 percent at the close of Q4. For comparison’s sake, Federal Housing Administration (FHA) loans totaled 4.8 percent and Veterans Affairs (VA) loans amounted to 2.4 percent. The total for all loans (i.e., industry average) was 2.9 percent.
- Foreclosure starts broadened 6 percent to 45,203, while third-party and foreclosure sales fell 14 percent to 13,448 in Q4.