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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.


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


(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.