Foreclosures on homes with loans backed by Fannie Mae and Freddie Mac declined 9% year-over-year in Q1 2020, while forbearances ticked up sharply, according to the latest Foreclosure Prevention and Refinance Report from the Federal Housing Finance Agency (FHFA).
A total of 7,704 third-party foreclosure sales took place on homes backed by the GSEs in Q1 2020, down 9% from the same quarter a year ago. Meanwhile, foreclosure starts declined 3%, totaling 28,978 in Q1, according to the FHFA’s report.
The number of forbearance plans initiated in Q1 2020 rose to 170,533, which is up markedly from fewer than 7,000 Q1 2019. The sharp incline aligns with the GSEs’ decision to allow homeowners impacted by the COVID-19 pandemic to enter forbearance plans.
The GSEs also completed 16,773 loan modifications in Q1 2020. Of those, 38% lowered monthly payments by more than 20%, 23% included principal forgiveness, and 64% were extended term only modifications.
Loan performance at the GSEs improved slightly during the start of 2020, with serious delinquencies—loans 90 or more days past due—ticking down from 0.65% in Q4 2019 to 0.64% in Q1 2020.
The percentage of loans between 60- and 90-days delinquent was 0.92% in Q1 2020, down from 0.96% in the previous quarter. The rate of newly delinquent loans rose slightly from 1.21% to 1.25%.
In total, the GSEs completed 26,910 foreclosure prevention actions in Q1. Of those 25,762 were home retention actions, and 1,148 required the home to be forfeited.
Since entering conservatorship, Fannie Mae and Freddie Mac have completed 4.4 million foreclosure prevention efforts, with 3.7 million homeowners able to retain their homes as a result.
Refinance volume at the enterprises ticked up in Q1 2020 as mortgage rates declined. Cash-out refinances made up 36% of GSE loan refinances in March. There were eight refinances completed through FHFA’s High LTV Refinance Option in Q1 2020, just one fewer than the previous quarter.