The Federal Housing Finance Agency (FHFA) recently released its third quarter 2021 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac completed 180,566 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,210,485 since the start of conservatorships in September 2008.
The report also shows that 43% of loan modifications completed in the third quarter reduced borrowers’ monthly payments by more than 20%. The number of refinances decreased from 1.614 million in the second quarter to 1.286 million in the third quarter.
The enterprises’ serious delinquency rate dropped from 1.99% to 1.55% at the end of the quarter. This compares with 8.19% for Federal Housing Administration (FHA) loans, 4.48% for Veterans Affairs (VA) loans, and 3.40% for all loans (industry average).
Other highlights from the report include:
Forbearance: The total number of loans in forbearance plans continued to trend downward since its peak in May, as initiated forbearance plans decreased but remained elevated through the third quarter of 2021 compared with pre-pandemic levels. As of Sept. 30, 2021, there were 320,009 loans in forbearance, representing approximately 1.07% of the enterprises’ single-family conventional book of business, down from 490,508 or 1.65% at the end of the second quarter.
Mortgage Performance: The 60-plus days delinquency rate dropped from 2.14% at the end of the second quarter to 1.69% at the end of the third quarter. The delinquency rates remained much higher than pre-coronavirus rates due to the forbearance programs offered to borrowers affected by the pandemic.
Foreclosures: The number of foreclosure starts increased 16% to 7,253, while third-party and foreclosure sales rose 11% to 2,534 in the third quarter.
Real Estate Owned (REO) Activity & Inventory: The enterprises’ REO inventory increased 2% from 7,840 in the second quarter to 8,001 in the third quarter, as REO acquisitions outpaced property dispositions. The total number of property acquisitions increased 13% to 1,358, while dispositions decreased 35% to 1,197 during the quarter.