The Federal Housing Finance Agency (FHFA) has released its 2023 Foreclosure Prevention and Refinance Report [1] for the second quarter of 2023, showing that Fannie Mae and Freddie Mac completed 47,370 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,818,471 since the start of conservatorships in September 2008.
The report also shows that 33% of loan modifications completed in Q1 reduced borrowers’ monthly payments by more than 20%. The number of refinances increased from 78,445 in Q1 of 2023, to 93,952 in Q2 of 2023.
The GSEs’ serious delinquency rate declined slightly from 0.60% to 0.55% at the end of Q1, this compares with 3.71% for Federal Housing Administration (FHA) loans, 2.15% for Veterans Affairs (VA) loans, and 1.61% for all loans (industry average).
Other highlights from the Q2 2023 Foreclosure Prevention and Refinance Report [1] include:
- Forbearance: At the end of Q2, there were 54,109 loans in forbearance, representing approximately 0.17% of the Enterprises’ single-family conventional book of business, down from 65,109 or 0.21% at the end of Q1 of 2023. Approximately 2% of these loans have been on a forbearance plan for more than 12 months.
- Mortgage performance: The 60-plus day delinquency rate decreased slightly from 0.75% at the end of Q1 of 2023 to 0.72% at the end of Q2 of 2023.
- Foreclosures: There were 3,783 completed third-party and foreclosure sales in Q2, up 2% compared with Q1 of 2023. The number of foreclosure starts decreased from 19,809 in Q1 to 17,919 in Q2 of 2023.
- Foreclosure prevention activity and home forfeiture actions: There were 193 completed short sales and deeds-in-lieu in Q2, bringing the total to 704,628 since the start of conservatorships. The number of completed short sales and deeds-in-lieu increased 30% in Q2 compared to Q1 of 2023. These foreclosure alternatives help to reduce the severity of losses resulting from a borrower’s default and minimize the impact of foreclosures on borrowers, communities, and neighborhoods.
- Real estate-owned (REO) activity & inventory: The GSEs’ REO inventory decreased 1.2% from 11,190 in Q1 of 2023 to 11,061 in Q2 of 2023, as property dispositions outpaced acquisitions. The total number of property acquisitions decreased slightly to 1,639, while dispositions rose 16% to 1,767 during Q2.
- Delinquent loans by state: The total number of the GSEs' delinquent loans increased in Q2 of 2023. Approximately 34% of the Enterprises' troubled borrowers had missed three or more payments at the end of the quarter. California reported the highest number of 90-plus days delinquent loans, followed by Florida and Texas. As of June 30, 2023, approximately 33% of the troubled borrowers in California had missed three or more monthly payments, compared to 38% in Florida, and 31% in Texas.
FHFA’s quarterly foreclosure prevention and refinance reports include data on the GSEs’ mortgage performance, delinquencies, and active forbearance plans, as well as forfeiture actions and refinances by state.
Click here [1] for more information and to access the FHFA’s Q2 2023 Foreclosure Prevention and Refinance Report.