According to the latest Foreclosure Prevention and Refinance Report from the Federal Housing Finance Authority (FHFA) for Q4 of 2020 [1], Fannie Mae and Freddie Mac (GSEs) completed 362,912 foreclosure prevention actions in Q4, bringing the total to 5,588,253 since the start of conservatorship in September 2008. Of these actions, 4,886,910 have helped troubled homeowners stay in their homes, including 2,440,966 permanent loan modifications.
Initiated forbearance plans dropped to 179,644 in Q4 from 230,714 in Q3. The total number of loans in forbearance plans at the end of the quarter was 804,559, representing approximately 2.8% of the total loans serviced, and 69% of the total delinquent loans.
According to the Mortgage Bankers Association's (MBA) latest Forbearance and Call Volume Survey [2], an estimated 2.5 million homeowners are now in forbearance plans as of March 14, 2021.
In Q4, 14% of modifications were modifications with principal forbearance. Modifications with extend-term only accounted for 70% of all loan modifications during Q4. There were 823 completed short sales and deeds-in-lieu during Q4, bringing the total to 701,343 since GSE conservatorship began in September 2008.
In Q4, the GSEs completed 362,089 home retention actions, compared to 538,527 in Q3, including 9,347 permanent loan mods; 7,199 repayment plans; 160,262 forbearance plans; 185,112 payment deferrals; and 169 charge-offs-in-lieu, helped delinquent borrowers stay in their homes during Q4.
Black Knight recently reported [3] that after eight consecutive months of improvement, the national mortgage delinquency rate rose slightly in February from 5.85% to 6.0%.
The GSEs completed 9,347 loan mods in Q4, a decrease of 13% from Q3. Fannie Mae's permanent loan modifications decreased 13% to 5,757 and Freddie Mac's decreased 14% to 3,590 during Q4.
Foreclosure starts decreased 7.0% to 6,302, while third-party and foreclosure sales increased 8.0% to 1,933 in Q4.
The FHFA also reported that total refinance volume fell in Q4, but continued in record breaking territory with mortgage rates having decreased further in December, with the average interest rate on a 30-year fixed-rate mortgage (FRM) falling to 2.68% from 2.77% in November. According to Freddie Mac’s latest Primary Mortgage Market Survey (PMMS) [4], the 30-year FRM is currently averaging 3.17%.
As rates rise, are more Americans being shut out of their opportunity to refinance?
Increasing rates are "leaving potential homebuyers with less purchasing power. Unfortunately, this has disproportionately affected the low end of the market, where supply is the slimmest,” Khater said [5]. "During the course of the pandemic, ‘home’ has become more important than ever. As a result, strong purchase demand continues—but buyers also outnumber the sellers."
Click here [1] to view the FHFA’s Q4 Foreclosure Prevention and Refinance Report.