The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac have reached a significant milestone, completing more than three million foreclosure prevention actions since the start of conservatorship in September 2008. FHFA noted this milestone in its third quarter Foreclosure Prevention Report (also known as the Federal Property Manager’s Report), which details results of foreclosure prevention programs.
Helping families avoid foreclosure through loan modification and other programs has been a priority of the agency and is one of the key goals of FHFA’s Strategic Plan for Enterprise Conservatorships.
"Three million completed foreclosure prevention actions is a significant achievement," said FHFA Acting Director Edward J. DeMarco. "It represents real assistance to homeowners, improved stability for their communities, and has produced meaningful savings for taxpayers. I am grateful for the persistent effort of everyone at FHFA, Fannie Mae, and Freddie Mac, who have contributed to reaching this milestone."
Foreclosure prevention activities generally fall into two broad categories: home retention actions and foreclosure alternatives. The former includes loan modifications through the Home Affordable Modification Program (HAMP) and other non-HAMP modification programs, forbearance plans and repayment plans. The latter includes deeds-in-lieu of foreclosure, streamlined modifications and short sales.
The more than three million foreclosure prevention actions completed since the start of the conservatorships have helped roughly 2.5 million borrowers stay in their homes through loan modifications and other actions. In addition, over 500,000 borrowers avoided foreclosure through short sales or deeds-in-lieu.
Working with Fannie Mae and Freddie Mac, FHFA has introduced and refined a number of programs to enhance foreclosure prevention efforts.
►Standard Short Sales: Announced in August 2012 to consolidate four existing short sales programs into one. This program allows servicers to expedite processing a short sale for borrowers with a hardship and recognizes Permanent Change of Station orders as a valid hardship for military personnel.
►Streamlined Modification Initiative: Announced in March 2013 to eliminate the administrative barriers associated with document collection and evaluation. This program requires 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.
►Standard Deed-in-Lieu: Announced in November 2012 to align deed-in-lieu guidelines for both Fannie Mae and Freddie Mac and emphasize the requirement that servicers are required to consider a home retention option first.
►The Servicing Alignment Initiative: Announced in April 2011 to address concerns regarding servicer performance issues and modification program inconsistencies. This initiative required servicers to do a better job of resolving delinquencies in a more consistent, efficient and expeditious manner.
The third quarter 2013 Foreclosure Prevention Report includes information on delinquencies, foreclosure prevention activities and Real Estate-Owned (REO) properties. The report also features a current, interactive Borrower Assistance Map for Fannie Mae and Freddie Mac mortgages.
Also noted in 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 totaled nearly 974,000 since the start of conservatorship.
►In the third quarter of 2013, the number of Fannie Mae and Freddie Mac delinquent loans continued to drop, with seriously delinquent loans declining 8 percent nationally.
►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.
►One-third of permanent loan modifications in the third quarter included principal forbearance. In addition to the foreclosure prevention actions, Fannie Mae and Freddie Mac have completed more than 18 million refinances since April 2009 including more than 2.9 million through the Home Affordable Refinance Program (HARP).