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Don’t Adjust Your Screen, Serious Delinquencies Really Are That Low

Avoid Foreclosure BHThe Federal Housing Finance Agency [1] (FHFA) released its third quarter Foreclosure Prevention Report which shows that Fannie Mae and Freddie Mac completed 46,390 foreclosure prevention actions in the third quarter of 2016, bringing the total number of foreclosure prevention actions to more than 3.7 million since the start of the conservatorships in September 2008.

The report also shows that the serious delinquency rates of Fannie Mae and Freddie Mac loans declined to their lowest levels since 2008. This compared with 4.4 percent for Federal Housing Administration (FHA) loans, 2.3 percent for Veterans Affairs (VA) loans, and 3.0 percent for all loans (Industry average). Of these actions, 3,127,237 have helped troubled homeowners stay in their homes including 1,993,692 permanent loan modifications.

Broken down further, Home Retention Actions totaled 40,223, with the repayment plans totaling 7,515 and forbearance plans numbering 1,407. Charge-offs-in-lieu totaled 208. On the Nonforeclosure-Home Forfeiture Actions side, the total was 6,167, with short sales coming out to 4,373 and deeds-in-lieu totaling 1,794.

Modifications with extend-term only accounted for 44 percent of all loan modifications in the first quarter due to improved house prices and a declining HAMP eligible population. As of September 30, 2016, approximately 21 percent of loans modified in the third quarter of 2016 had missed two or more payments, one year after modification.

A total of 1,080,472 troubled homeowners have been offered a HAMP trial modification since the program started in April 2009 and 655,249 of these homeowners have been granted permanent modifications through HAMP. A total of 2,500 homeowners were in a HAMP trial modification period at the end of the third quarter, but this number is a reflection of 1,080,472 modifications started as of Q2 minus the number of trials disqualified (78,779) and the number of trials cancelled (343,944). This number also reflects the subtraction of those trials turned into permanent modifications that numbered 655,249.

Non-HAMP modifications accounted for 93 percent of all permanent loan modifications in the third quarter. A total of 28,877 homeowners received permanent loan modifications through the Enterprises' proprietary modification programs in the second quarter, bringing the total number of non-HAMP permanent modifications to 1,241,085 since April 2009.