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Freddie Mac's seven facts about the foreclosure process

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In a recent blog post, Freddie Mac Executive Vice President Anthony Renzi asked if Americans are confused about the foreclosure process. Now that major servicers for the banks and government-sponsored enterprises have begun cleaning up their processes, Renzi laid out seven key facts about how Freddie Mac – the third largest holder of foreclosed homes behind the Department of Housing and Urban Development and Fannie Mae – handles its responsibilities. One: Freddie owns or guarantees 12.4 million single-family mortgages, and roughly 500,000 are seriously delinquent, roughly 10% of all serious delinquencies in the industry. However, Freddie reported $13.5 billion in homes that were already repossessed through foreclosure, adding $6.8 billion in the third quarter. Jim Vogel, of FTN Financial, said the fastest growing portion of Freddie's agency mortgage-backed securities portfolio, however, is delinquent loans, and the company's debt outstanding grew by $3 billion in December. Two: Freddie has contracts with 2,000 mortgage servicing companies and pays them a total of $5 billion annually. When the robo-signing scandal broke in late September, Freddie directed all of them to conduct internal reviews. Three: Renzi said the 211,000 delinquent borrowers who avoided foreclosure in the first nine months of 2010 nearly doubled the 114,000 foreclosures that took place in the same period. But according to its regulator, the Federal Housing Finance Agency, both Fannie Mae and Freddie Mac combined to start more than 860,000 foreclosures in the first three quarters of 2010. In the third quarter alone, foreclosures at the GSEs doubled modifications. Four: Freddie takes action when those handling its foreclosures do not follow the letter of the law. See the wilting business of the Florida Law Firm of David J. Stern. Five: It takes an average of 449 days, on average, to foreclose on home with a Freddie Mac mortgage. Six: These delays cost Freddie Mac and the taxpayers who prop the company up between $10,000 and $15,000 per year for every defaulted loan. Seven: Freddie allows servicers to decide when to stop or suspend a foreclosure if an alternative is available, Renzi said. Write to Jon Prior.

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