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According to the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the GSEs) completed 16,191 foreclosure prevention actions in May 2023, bringing the total to 6,803,424 since the start of the conservatorships in September 2008. Approximately 39% of these actions have been permanent loan modifications.
According to the FHFA, there were 5,152 permanent loan modifications in May, bringing the total to 2,650,244 since the conservatorships began in September 2008. Approximately 77% of the loan modifications in May 2023 involved extend term only. Modifications with principal forbearance accounted for 19% of all loan modifications during the month.
The number of borrowers who received payment deferrals after completing a COVID-19 related forbearance plan decreased 13% from 7,510 in April to 6,517 in May 2023.
The total number of loans in forbearance plans decreased in May, but remained elevated compared with pre-pandemic levels. As of May 31, 2023, there were 57,858 loans in forbearance, representing approximately 0.19% of the GSEs' single-family conventional book of business, down from 61,317 or 0.20% at the end of April. Approximately 2% of these loans have been in forbearance for more than 12 months. In measuring GSE mortgage performance over the month of May 2023, the 30-59 days delinquency rate decreased to 0.80%, while the serious delinquency rate declined to 0.57% at the end of May.
Third-party and foreclosure sales by the GSEs increased 7% to 1,270 in May, while foreclosure starts increased 9% to 6,125 in May.
In terms of GSE refinances, total refinance volume increased in May 2023 as mortgage rates fell in April. Mortgage rates rose in May 2023, as the average interest rate on a 30-year fixed rate mortgage increased to 6.43% from an April level of 6.34%.
The percentage of borrowers refinancing into shorter term 15-year mortgages decreased to 12% in May. The average interest rate savings of a 15-year mortgage over a 30-year mortgage has been higher in 2021 through 2023 compared to previous years. However, over this period, the higher monthly cost of a 15-year mortgage compared to the greater affordability of a 30-year mortgage has limited borrower interest in the 15-year mortgage due to increased mortgage rates.
Click here for more on the FHFA’s May 2023 Foreclosure Prevention and Refinance Report.
