The Federal Housing Finance Agency [1](FHFA) released its July Foreclosure Prevention Report [2] Wednesday outlining its most recent data on foreclosure prevention, including permanent loan modifications. One of the more dramatic changes in foreclosure prevention activities occurred in home forfeiture actions. In July, 884 short sales and 339 deeds-in-lieu were completed, down 24 percent compared to June, at 1,115 and 503 respectively.
Other foreclosure prevention actions utilized by the GSEs included retention strategies such as forbearance plans, repayment plans, and loan modifications. According to the report, there were 13,845 foreclosure prevention actions in July, bringing the total to 3,945,069 since the FHFA gained conservatorship in 2008. The report indicates permanent loan modifications decreased 1,368 month over month with 10,217 modifications in July.
Borrowers who received permanent loan modification who were considered “seriously delinquent” dropped 4 percent from 81 percent to 71 percent in July. The FHFA considers a borrower seriously delinquent when their loan is in the process of foreclosure plus loans that are three or more payments delinquent.
The GSEs combined serious delinquency rate dropped to 0.94 percent from 0.95 percent, the lowest year-to-date. Third-party and foreclosures sales decreased 14 percent in July to 5,117, also the lowest YTD. Foreclosure starts declined 6 percent from 13,028 in June to 12,255 in July.
When examining the reasons for delinquency, the FHFA cited curtailment of income, excessive obligation, unemployment, illness of principal mortgagor or family member, and marital difficulties as the top five reasons.
As reported on Friday [3], The U.S. Department of Labor [4]recently released its September 2017 Employment Situation, which was impacted by recent Hurricanes Harvey and Irma. “The Bureau of Labor Statistics noted that the number of workers who had a job but were not at work due to bad weather jumped to a two-decade high,” said First American Chief Economist Doug Duncan in reaction to the report. “The hurricane impact will dissipate over time, as we have observed during the aftermaths of previous major storms.”
The full report can be viewed here [2].