Report: 1.7 Million GSE Loans at Least 60 Days Past Due

The number of loans held by ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com that were 60-plus-days delinquent stood at 1.7 million at the end of the first quarter of 2010, the two companies' conservator said in a report to Congress this week.

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While the volume of past dues may seem like an extraordinary negative weight on a servicing community already stretched thin, the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) says the number of GSE loans in the 60-plus-days delinquency bucket actually decreased by 1.3 percent, or 23,800 loans, in Q1. It marked the first decline in two years.

The number of new delinquencies in Fannie and Freddie's portfolios dropped also. Loans that were only one month delinquent decreased by 115,600 loans, or 16 percent, during the first quarter to approximately 609,000.

FHFA says servicers are working through the glut of GSE delinquencies at a much faster pace, too. According to the agency's ""report to Congress"":http://www.fhfa.gov/webfiles/15860/1Q10FPR.pdf foreclosure prevention activity increased 75 percent in the first quarter of 2010 compared to the previous three months. Approximately 239,000

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foreclosure aversion actions were taken, driven by increases in all forms of home retention activity, short sales, and deeds-in-lieu.

Completed loan modifications doubled to nearly 137,600 in Q1 with the majority of loan restructuring completed through Home Affordable Modification Program (HAMP), FHFA reports. GSE servicers moved 93,056 borrowers from HAMP trials into permanent modifications during the first three months of this year.

Fifty-four percent of all loan modifications completed on GSE loans during the quarter involved a combination of rate reduction and term extension. Approximately two-thirds lowered borrowers' monthly payments by over 20 percent, FHFA said.

Nearly 55,900 of the enterprises delinquent loans received repayment plans during the quarter and 18,000 were granted forbearance plans.

More than 24,300 short sales and deeds-in-lieu were also completed in Q1, an increase of 23 percent over the prior quarter.

FHFA reported that Fannie and Freddie's cumulative refinance volume under the administration's Home Affordable Refinance Program (HARP) increased 53 percent during the first quarter to nearly 291,584.

Just as home retention efforts and short sales increased, the number of non-performing loans liquidated through foreclosure also grew.

FHFA's data shows that the GSEs' foreclosure starts increased to 246,000 during the first three months of this year. That compares to 243,000 foreclosures initiated in the previous quarter. Completed foreclosure sales and third-party sales increased 26 percent to nearly 97,900.