FHFA expands reporting on homeowner assistanceMortgagePress.comFederal Housing Finance Agency, James B. Lockhart, Federal Property Manager, bankruptcy, loan modifications, Streamlined Modification Program
Federal Housing Finance Agency (FHFA) Director James B. Lockhart
has submitted to Congress FHFA's latest report as a Federal
Property Manager (FPM) detailing actions taken to prevent
unnecessary foreclosures. The report includes metrics not
previously reported; specifically, reasons for default, loans in
bankruptcy, and types of modifications.
Since late November, the Enterprises had suspended foreclosure
sales and evictions on owner-occupied properties. The suspensions,
which ended on March 31, 2009, allowed servicers additional time to
work with borrowers in foreclosure who were eligible for the
Streamlined Modification Program (SMP). The impact of the
suspensions caused completed foreclosure sales and third-party
sales to decline 77 percent from the prior three-month average of
16,342 to 3,711 in December, and 79 percent to 3,391 in January. At
the same time, loans that were 60+ and 90+ days delinquent
increased. All loans 60-plus days delinquent increased from 834,831
as of November 30 to 1,229,051 as of January 31, representing an
increase of 47 percent over the period. However, prime loans
60-plus days delinquent increased by 69.6 percent while nonprime
loans increased by 23 percent.
The report, based on data from the Enterprises' 30.6 million
residential mortgages, shows that during or at the end of
January:
• The top five identified reasons for default were
curtailment of income (34.1 percent), excessive obligations (19.8
percent), unemployment (8.1 percent), illness of the principal
mortgagor or a family member (6.5 percent) or marital difficulties
(3.5 percent). This is a new metric introduced this month.
• Loans 90-plus days delinquent (including those in
bankruptcy and foreclosure) as a percent of all loans, increased
from 1.67 percent as of Oct. 31 to 2.14 percent as of December 31
and 2.45 percent of Jan. 31.
• Loans in bankruptcy proceedings represented 0.16 percent
of all loans serviced. This is a new metric introduced this
month.
• Loans for which the foreclosure process was started as a
percent of loans 60+ days delinquent declined from 6.38 percent in
December to 6.12 percent in January. During 2008, foreclosure
starts as a percent of 60-plus days delinquent loans ranged from a
low of 5.25 percent in November to a high of 9.22 percent in
February 2008 and averaged 7.33 percent.
• Loans for which a foreclosure or third party sale was
completed as a percent of loans 60+ days delinquent decreased from
2.43 percent for October, 1.79 percent for November, 0.40 percent
for December and 0.28 percent for January.
• In January 8,953 loan modifications were completed
compared to 8,688 in December and the prior three-month average of
7,926. This represents a three percent increase in loan
modifications by Fannie Mae and Freddie Mac from December 2008 to
January 2009. Of the modifications completed, 65.2 percent required
an interest rate reduction and term extension, 19.5 percent a term
extension only, and 5.3 percent an interest rate reduction only.
Modification types were broken out in greater detail this
month.
For a copy of the Letter and FHFA Federal Property Managers
Report No. 5 (includes monthly Foreclosure Prevention Report),
click here.
For more information, visit www.fhfa.gov.
