""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com modified nearly 37,000 home loans during the first quarter of 2009, according to the GSEs' regulator, the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA). The Q1 figure represents a 57 percent increase over the fourth quarter of 2008 and more than double the number of modifications made in the first quarter of last year.
James B. Lockhart, director of FHFA, said, ""The use of serious loan modifications by Fannie Mae and Freddie Mac has risen dramatically. As a result, more homeowners are seeing payments significantly reduced and fewer people will lose their homes.""
""FHFA's report"":http://www.fhfa.gov/webfiles/2976/1Q09_Foreclosure_Prevention_Report_Final_06-23-09.pdf shows that during the first quarter of the year, modifications represented 43 percent of all the GSEs' foreclosure prevention workouts, up from 33 percent in the prior quarter. Modifications with more than 20 percent reduction in monthly payments rose from 2 percent in the first quarter of last year to 52 percent in the first quarter of this year.
Fannie's and Freddie's foreclosure prevention efforts - including modifications, forebearance, repayment plans, and other measures - rose substantially in the first quarter. All in all, approximately 87,000 workouts were completed during the first three months of the year, an increase of 20 percent over the prior quarter and more than double the volume of the first quarter 2008. Ninety percent of these actions were successful in allowing the borrower to keep their home.
Although the GSEs' mortgage delinquencies continued to increase during the first quarter of 2009, FHFA said the rate of delinquency is consistently lower than the industry average. As of March 31, 2009, the percentage of Fannie- and Freddie-owned loans that were 60-plus days delinquent was 3.6 percent, compared with 6.1 percent for VA loans, 10.2 percent for FHA loans, and 9.2 percent for the industry average. Fannie Mae and Freddie Mac own or guarantee 56 percent of all mortgages outstanding but only 22 percent of all seriously delinquent loans.
FHFA's report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures on the GSEs' 30 million residential mortgages. The report reflects loan modification volumes under the Streamlined Modification Program (SMP) initiated in November 2008 but does not include volumes from the federal government's new Home Affordable Modification program, which was still in development at the end of the first quarter.
""We encourage servicers to work aggressively to continue to identify borrowers who are willing and able to make affordable mortgage payments,"" said Lockhart. ""These efforts at modifying mortgages and refinancing homeowners into safer mortgages are important elements of the stabilization of the housing market and the U.S. economy.""