The fourth quarter 2021 Foreclosure Prevention and Refinance Report from the Federal Housing Finance Agency (FHFA) shows a drop in loans in serious delinquency. Over 150,000 loans were stopped from going into foreclosure as well.
According to the report, Fannie Mae and Freddie Mac completed 153,793 foreclosure prevention actions during the quarter. The report also shows that 46% of loan modifications completed in the fourth quarter reduced borrowers' monthly payments by more than 20%.
The number of refinances decreased slightly from 1.286 million in the third quarter to 1.266 million in the fourth quarter, the report states.
The serious delinquency rate for Freddie Mac and Fannie Mae loans dropped from 1.55% to 1.19% at the end of the fourth quarter, according to the report. This compares with 6.48% for Federal Housing Administration (FHA) loans, 3.82% for Veterans Affairs (VA) loans, and 2.83% 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 2020, but remained elevated through the fourth quarter of 2021 compared with pre-pandemic levels. As of Dec. 31, 2021, there were 178,019 loans in forbearance, representing approximately 0.59% of Fannie Mae and Freddie Mac’s single-family conventional book of business, down from 320,009 or 1.07% at the end of the third quarter.
- Mortgage Performance: The 60+ days delinquency rate dropped from 1.69% at the end of the third quarter to 1.34% at the end of the fourth quarter. The delinquency rates remained elevated as a result of the COVID-19 pandemic and the forbearance programs offered to affected borrowers.
- Foreclosures: The number of foreclosure starts decreased 15% to 6,178, while third-party and foreclosure sales rose 27% to 3,213 in the fourth quarter.
