FHFA: 47% Of Modified Loans Got Lower Monthly Payments

Freddie Mac and Fannie Mae completed 217,020 foreclosure prevention actions in Q2, bringing the number of homeowners the GSEs have helped during conservatorship to 6.030 million, according to the Federal Housing Finance Authority’s Foreclosure Prevention and Refinance Report.

57% of loan modifications reduced monthly payments by more than 20%, though the number of refinances began to fall in Q2.

Forbearance starts dropped 32% to 6,233 in the second quarter, while third-party and foreclosure sales fell 9% to 2,281. The GSEs’ serious delinquency rate dropped from 2.48% to 1.99% by the end of Q2. 

The total number of loans in forbearance continues to drop from its latest peak in May 2021, though new forbearance plans fell but stayed high through Q2 compared to pre-pandemic levels. As of June 30, 2021, there were 490,508 loans in forbearance, down from 660,039 or 2.2% at the end of Q1. 

Fannie and Freddie’s serious delinquency rate dropped from 2.48% to 1.99%, blowing other loan servicers’ rates out of the water. Serious delinquencies are at 9.48% for Federal Housing Administration loans and 5.02% for Veterans Affairs loans. The industry average is 4.03%.

Their real-estate owned (REO) inventory fell 8% from 8,522 in the first quarter to 7,840 in the second quarter. The total number of acquisitions fell 2% to 1,200, and the total number of dispositions dropped 25% to 1,832. 

The FHFA’s Foreclosure Prevention and Refinance Report includes data on delinquency rates, mortgage performance, and active forbearance plans, as well as forfeitures and refinances by state.