GSEs’ Foreclosure Prevention Efforts Slip in First Quarter

Foreclosure prevention actions on loans held by ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com declined during the first three months of this year, driven primarily by decreases in loan modifications and repayment plans.

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The ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) issued a report Monday detailing efforts by the GSEs and their servicers during the first quarter to resolve delinquent single-family mortgages.

Completed foreclosure prevention actions â€" which include home retention initiatives such as loan mods and repayment plans, as well as home forfeitures through short sales and deeds-in-lieu â€" totaled 171,531 during the January to March timeframe, compared to 208,416 in the previous quarter.

Permanent loan modifications, including those processed through the Home Affordable Modification Program

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(HAMP), declined for the third consecutive quarter to 86,201. That’s down from 119,778 during the fourth quarter of 2010.

Short sales and deeds-in-lieu of foreclosure were essentially the same as the previous quarter at 25,705 and 1,849, respectively.

According to ""FHFA's latest report"":http://www.fhfa.gov/webfiles/21518/1q11_fpr_final.pdf, even with the drop-off in loss mitigation actions Fannie and Freddie's delinquency rates ""remain below industry levels.""

Between the two companies, they held 553,000 loans 30-59 days past due as of the end of March. Loans beyond this initial bucket â€" including 60-plus day delinquencies and those already in foreclosure â€" stood at 1,382,000 million. Of these, 1,197,000 were classified as seriously delinquent or in foreclosure.

The analysts at ""Barclays Capital"":http://www.barcap.com note that Fannie and Freddie’s delinquency roll rates have declined 20 to 30 percent year-over-year.

“We expect the trend to continue absent a shock to macroeconomic factors,” they said in a report issued Monday.

In the first quarter, the GSEs' foreclosure starts declined while completed third-party and foreclosure sales increased.

Foreclosure was initiated on 260,000 GSE loans in Q1, compared to 310,000 in Q4. Completed foreclosures totaled 88,000, compared to 77,000 during the previous quarter.