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GSEs Help 130K Borrowers Avoid Foreclosure in Q1, Delinquencies Fall

As ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/ continue their efforts to prevent millions of foreclosures, delinquency rates are also declining, with 60-plus delinquencies down to the lowest level since the first quarter of 2009, according to a report from the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA).


So far, efforts from the GSEs have led to nearly 2.8 million foreclosure prevention actions since the start of the September 2008 conservatorship, the FHFA reported Monday.

More than 2.3 million of the foreclosure prevention actions allowed struggling borrowers to keep their home, including nearly 1.4 million permanent loan modifications.

In the first quarter of this year, 130,000 foreclosure prevention actions were completed, essentially unchanged from the previous quarter.

Of those actions, about 63,800 were loan modifications, and half of the borrowers who received modifications in the first quarter had their monthly payments reduced by more than 30 percent.

By the end of March, about 12 percent of loans that were modified in the second quarter of 2012 were past due by two or more payments.


During the first quarter, there were about 25,800 completed short sales and 4,400 deeds-in-lieu, leading to 30,200 home forfeiture actions, down 7 percent from the previous quarter, FHFA reported. Meanwhile, home retention actions totaled 99,800 in the first quarter, up from 97,700 in the fourth quarter.

The agency also found the serious delinquency rate for GSE borrowers decreased to 3 percent compared to 8 percent for Federal Housing Administration (FHA) loans.

However, more than half of the GSEs' seriously delinquent borrowers were past due by more than a year in the first quarter. Florida kept its spot as the state with the highest share of borrowers who have not paid their mortgage in more than a year, with 62 percent of borrowers in this category. New Jersey took second place, at 52 percent, followed by Hawaii (50 percent), Nevada (45 percent) and New York (44 percent).

On the upside, the number of borrowers who were past due by more than 60 days declined 11 percent in the first quarter to the lowest level since the first quarter of 2009.

Foreclosure starts saw an increase in the first quarter after rising to 141,000 from 135,000 in the fourth quarter of last year. Starts peaked at 339,000 in the third quarter of 2010 and totaled 109,000 in the first quarter of 2008.

Third party sales and foreclosure sales fell to 60,000 in the first quarter, down from 63,000 in the previous quarter. Foreclosure sales reached a height of 138,000 in the third quarter of 2010 and were down to 31,000 in the first quarter of 2008.

REO inventory for the GSEs continued to trend downward. At the end of the first quarter, REO inventory stood at 149,417, down from 154,737 in the fourth quarter of last year.

The GSEs also disposed of more REOs than they acquired, with REO dispositions at 61,918 over the first three months of this year compared to 56,598 acquisitions.

About Author: Esther Cho


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