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Helping Delinquent Borrowers Save Their Homes

For the GSEs, delinquency has dropped, according to the latest Foreclosure Prevention Report from the Federal Housing Finance Agency (FHFA). According to data from the FHFA, Fannie Mae and Freddie Mac’s overall delinquency rate fell in Q2, with the 60-plus-day delinquency rate dropping to 1.2 percent at the end of the quarter. However, the 30-59 days delinquent increased to 1.3 percent. The serious delinquency rate also decreased to 0.91 percent at the end of the quarter.

The report’s main purpose is to identify the Fannie Mae and Freddie Mac’s effectiveness at preventing foreclosures. It found that the GSEs completed 139,323 foreclosure prevention actions in the first half of 2018. This means that since Fannie Mae and Freddie Mac entered conservatorship in 2008, 2,238,770 of these actions have been permanent loan modifications, while 1,252,900 actions have been other forms of assistance that allowed troubled homeowners to stay in their homes.

In preventing foreclosures, the GSEs kept more people in their homes. To accomplish this, Fannie and Freddie completed 1,460 permanent loan modifications, 8,279 repayment plans, 8,206 forbearance plans and 388 charge-offs-in-lieu in Q2 2018, preventing more delinquent borrowers from losing their homes.

Fannie Mae and Freddie Mac completed 87,824 permanent loan modifications in the first half of 2018 and 51,460 loan modifications in the second quarter. Fannie Mae's permanent loan modifications rose 54 percent to 33,795 and Freddie Mac's increased 22 percent to 17,665 in Q2.

Around 78 percent of the loan modifications completed by the GSEs in 2018 have been 90+ days delinquent at the time of modification, while another 46 percent were originated before 2009.

In Q2 alone, Fannie and Freddie completed 70,945 foreclosure prevention actions, decreasing the number of 60+ days delinquent loans. This included 51,460 permanent loan modifications allowing more homeowners to stay in their homes.

The FHFA also notes that in Q2 2018, Fannie and Freddie completed 68,333 home retention actions, up from 65,615 in Q1. This includes 51,460 permanent loan modifications, 8,279 repayment plans, 8,206 forbearance plans and 388 charge-offs-in-lieu.

Additionally, foreclosure starts declined 16 percent to 39,002, and third-party and foreclosure sales decreased 3 percent to 13,464 in the second quarter.

Find the full report from the FHFA here.

About Author: Seth Welborn

Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer.
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