WASHINGTON (12/17/08)—The Federal Housing Finance Agency (FHFA), regulator of Fannie Mae and Freddie Mac, reported progress is being made on mortgage workout and loss mitigation efforts have improved since the end of 2007. The FHFA Tuesday released its monthly Foreclosure Prevention Report
September. The numbers show that while the number of loans 60-days or more delinquent have increased, loans for which foreclosure was initiated has decreased. According to the agency, loss mitigation actions have increased for all workout types and short sale and deed-in-lieu volumes increased significantly in September 2008. Compared to 2007, the government-sponsored enterprises’ loss mitigation performance ratio showed considerable sustained improvement with the year-to-date ratio at 54.6% versus 43.5% for 2007. The FHFA also noted that as of Sept. 30 of the GSE’s 30.7 million residential mortgages:
* Loans 60 or more days delinquent (including those in bankruptcy and foreclosure) as a percent of all loans increased from 1.46% as of March 31 to 1.73% as of June 30 to 2.21% percent as of Sept. 30; * Loans for which foreclosure was started as a percent of loans 60 or more days delinquent declined from 8.29% for the first quarter and 7.81 % for the second quarter to 7.12% for the third quarter; * Loans for which foreclosure was completed as a percent of loans 60 ore more days delinquent increased from 2.41% for the first quarter to 2.55 % for the second quarter and stabilized at 2.55% for the third quarter; and * Modifications completed declined from 15,636 for the first quarter to 15,372 for the second quarter to 13,450 for the third quarter. However, loans reinstated through Fannie Mae’s HomeSaver Advance (HSA) Program increased from 1,244 in the first quarter to 16,658 in the second quarter and 27,277 in the third quarter.