Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have completed more than 3 million foreclosure prevention actions – including modifications, refinancings and short sales – since the start of conservatorship in September 2008, the Federal Housing Finance Agency (FHFA) notes in its third quarter Foreclosure Prevention Report.
In a release, FHFA Acting Director Edward J. DeMarco called the milestone ‘a significant achievement.’
‘It represents real assistance to homeowners, improved stability for their communities, and has produced meaningful savings for taxpayers,’ he says of the GSEs' foreclosure prevention activities, including loan modifications through the Home Affordable Modification Program (HAMP) and other non-HAMP modification programs, forbearance plans and repayment plans.
The foreclosure prevention efforts also include deeds-in-lieu of foreclosure, streamlined modifications and short sales, which have helped roughly 2.5 million borrowers stay in their homes. More than 500,000 borrowers had avoided foreclosure through short sales or deeds-in-lieu through these programs, as of the third quarter, FHFA says.
The FHFA points out that during the past several years it has introduced and refined a number of programs to enhance the GSEs' foreclosure prevention efforts. For example, in August 2012 it consolidated four existing short sales programs into one, thus helping mortgage servicers expedite the short sale process. In March 2013, it eliminated the administrative barriers associated with document collection and evaluation by introducing a program requiring servicers to offer eligible borrowers who are at least 90 days delinquent on their mortgage a trial offer, including new mortgage terms, without also requiring borrowers to document their hardship or financial situation.
Also, in November 2012 the FHFA introduced a new program that aligns deed-in-lieu guidelines for both the GSEs and emphasizes the requirement that servicers are required to consider a home retention option first. What's more, in April 2011 the FHFA addressed concerns regarding servicer performance issues and modification program inconsistencies by requiring servicers to do a better job of resolving delinquencies in a more consistent, efficient and expeditious manner.
According to the report, nearly 1.5 million permanent loan modifications have been completed since the start of conservatorship. Other forms of assistance that allowed troubled homeowners to save their homes, since the start of conservatorship, totaled nearly 974,000.
The number of Fannie Mae and Freddie Mac delinquent loans continued to drop in the third quarter, with seriously delinquent loans declining 8%.
More than half of troubled homeowners who received permanent loan modifications in the third quarter had their monthly payments reduced by more than 30 percent. In addition, about one-third of permanent loan modifications included principal forbearance.
In addition to the foreclosure prevention actions, Fannie Mae and Freddie Mac had completed more than 18 million refinances, as of the third quarter, including more than 2.9 million through the Home Affordable Refinance Program.