[1]Fannie Mae [2] and Freddie Mac [3] have completed approximately 3.3 million foreclosure prevention actions in the last six years, according to the Federal Housing Finance Agency (FHFA [4])'s Q3 Foreclosure Prevention Report [5] released Monday.
Including the 72,700 foreclosure prevention actions completed by the GSEs in the third quarter, the two Enterprises have performed about 3.3 million such actions since the start of the conservatorship under FHFA in September 2008, according to the report. About 2.8 million of those 3.3 million foreclosure prevention actions helped the borrowers stay in their homes. About 1.7 million of those received assistance in the form of permanent loan modifications. Other foreclosure prevention actions completed that have kept borrowers in their homes included repayment plans (791,300), forbearance plans (169,000), charge-offs-in-lieu (10,900), and HomeSaver Advance from Fannie Mae (70,100), according to the report.
Other foreclosure prevention actions completed in the last six years since the conservatorship include short sales, which are sales of a home for less than the outstanding balance of the mortgage (528,200), and deeds-in-lieu of foreclosure (65,810), for a total of nearly 594,000, according to the report. Nearly 12,900 of these short sales and deeds-in-lieu combined were completed during the third quarter.
Year-to-date through the first three quarters of 2014, Fannie Mae and Freddie Mac completed approximately 241,300 foreclosure prevention actions, according to the report. The pace of foreclosure prevention actions has been declining year by year, however – the number has fallen from 665,800 in 2011 down to 541,200 in 2012 to 447,700 in 2013, and the 2014 number for the full year figures to decline by at least 100,000 if the current pace continues.
Also according to FHFA's report, the REO (real estate owned) inventory of Fannie Mae and Freddie Mac declined by 9 percent during Q3 down to 120,100, as dispositions outpaced acquisitions. Also, about 34 percent of all permanent loan modifications borrowers received in the third quarter reduced monthly payments by an average of more than 30 percent. Nearly 22 percent of borrowers who received permanent loan mods in the third quarter had portions of their mortgage balance forborne.
Foreclosure starts dropped by 13 percent down to approximately 74,600 in the third quarter, according to the report, while third-party sales and foreclosure sales declined by approximately 9 percent down to nearly 39,100.