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Q3 Shows Signs of Effective Foreclosure Prevention Actions

foreclosuresThe government-sponsored enterprises (GSEs) completed 539,451 foreclosure prevention actions during the third quarter of this year, according to new data from the Federal Housing Finance Agency [1] (FHFA).

The total number of GSE loans in forbearance plans totaled 1.04 million by the end of the third quarter, which accounted for roughly 3.66% of the total loans serviced and 79% of the total delinquent loans. The third quarter also had 230,714 initiated forbearance plans, a substantial drop from the 1.51 million recorded in the second quarter.

Furthermore, the FHFA reported that 20% of modifications enacted by the GSEs in the third quarter were modifications with principal forbearance, while modifications with extend-term only accounted for 64% of all loan modifications during this three-month period. There were also 924 completed short sales and deeds-in-lieu during the quarter while foreclosure starts fell by 10% to 6,809 as third-party and foreclosure sales increased 75% to 1,794 in the third quarter.

The 60+ days delinquency rate in the third quarter was 3.58%, down from 4.08% in the second quarter. The GSEs’ serious delinquency rate – for loans that were delinquent 90 days of more – was 3.14% at the end of the third quarter – and the FHFA noted this level was much lower than the serious delinquency rates for the Federal Housing Administration loans (10.76%), Veterans Affairs loans (5.77%) and the industry average (5.16%).

The FHFA’s data was followed by a data report from Black Knight Inc. that found the number of mortgages in active forbearance rose by 37,000 over the seven-day period ending Dec. 15. Black Knight stated that 5.3% of all mortgages – approximately 2.79 million – are in forbearance as of Dec. 15, representing a total of $563 billion in unpaid principal, while more than 550,000 forbearance plans were set to expire by the end of December.