GSE Foreclosure Prevention Report Card
The Federal Housing Finance Agency released its November Foreclosure Prevention Report Friday which found the number of modifications completed by Fannie Mae (FNM) and Freddie Mac (FRE) increased 67.6 percent in November compared to the monthly average of the first nine months of 2008. “Loan modifications for October and November, which were the first two full months of the converservatorship, increased by 50 percent from the previous two months,” said James Lockhart, director of the FHFA, suggesting the data reflected an increased commitment of the servicers and GSEs to help borrowers keep their homes. For November, the report showed foreclosures were started on 5.25 percent of the 30.6 million residential mortgages the GSE's jointly serve, which is down from the 6.44 percent of foreclosures started in October. Foreclosure completions also dropped, from 2.33 percent in October to 1.73 percent in November. November marked a big change in the handeling of defaults for Fannie and Freddie. Both GSEs announced a suspension of foreclosure sales and evictions on all single-family properties scheduled to occur from Nov. 26 through January -- a suspension that was later extended through the end of February. The report said since only two business days of foreclosure activities in November were impacted by the suspension, it had little effect on the month's performance. However, the FHFA said it expects the suspension to have a greater impact in December and January. November showed early signs of loss mitigation efforts by Fannie and Freddie, as they posted a 61.7 percent loss mitigation ratio, according to the report, a ratio which allows for comparison of loss mitigation performance over time -- irrespective of delinquency rates. But as we sit well into the first quarter of the new year, job loss continues to surge and overall economic conditions continue to deteriorate -- requiring yet a further boost in modification efforts, as more Americans turn delinquent on their homes. As of November, loans 60+ and 90+ days delinquent were on the rise, reaching 2.73 percent and and 1.8 percent of all loans, respectively. Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.