FHFA: GSEs’ 3rd Quarter Delinquency Rate, Forbearances Decline
The Federal Housing Finance Agency released its third quarter Foreclosure Prevention and Refinance Report, showing Fannie Mae and Freddie Mac completed 69,362 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,660,364 since the start of conservatorships in September 2008.
The report also shows 53 percent of loan modifications completed in the second quarter reduced borrowers’ monthly payments by more than 20 percent. Refinances decreased significantly amid rising mortgage rates from 444,850 in the second quarter to 194,189 in the third quarter.
The Enterprises’ serious delinquency rate declined from 0.79 percent to 0.68 percent at the end of the third quarter. This compares with 4.26 percent for Federal Housing Administration (FHA) loans, 2.51 percent for Veterans Affairs (VA) loans, and 1.90 percent for all loans (industry average).
As of September 30, FHFA reported 78,432 loans in forbearance, representing 0.25 percent of the Enterprises single-family conventional book of business, down from 90,889 or 0.29 percent at the end of the second quarter. Four percent of these loans have been on a forbearance plan for more than 12 months.
The 60+ days delinquency rate dropped from 0.92 percent at the end of the second quarter to 0.83 percent at the end of the third quarter. The delinquency rates remained slightly higher than pre-coronavirus rates due to the forbearance programs offered to borrowers affected by the pandemic.
Foreclosure starts decreased to 17,327 while third-party and foreclosure sales increased 3 percent to 3,566 in the third quarter.
The Enterprises’ REO inventory increased 10 percent from 9,341 in the second quarter to 10,251 in the third quarter, as REO acquisitions outpaced property dispositions. Property acquisitions increased by 23 percent to 1,880, while dispositions decreased to 993 during the quarter.
FHFA also released its latest Enterprise Non-Performing Loan Sales Report on sale of non-performing loans by Fannie Mae and Freddie Mac, with sales information about NPLs sold through June 30. Borrower outcomes reflect NPLs sold through December 31, 2021.
The report said the GSEs sold 155,034 NPLs with a total unpaid principal balance of $28.7 billion from program inception in 2014 through June 30. The loans included in the NPL sales had an average delinquency of 2.8 years and an average current mark-to-market loan-to-value ratio of 86 percent (not including capitalized arrearages).
Other report highlights:
–The average delinquency for pools sold ranged from 1.1 years to 6.2 years.
–Fannie Mae has sold 104,467 loans with an aggregate UPB of $19.0 billion, an average delinquency of 2.8 years, and an average LTV of 84 percent.
–Freddie Mac has sold 50,567 loans with an aggregate UPB of $9.7 billion, an average delinquency of 2.7 years, and an average LTV of 90 percent.
–NPLs in New Jersey, New York, and Florida represent 41 percent of the NPLs sold.
–NPLs on homes occupied by borrowers had the highest rate of foreclosure avoidance outcomes (41.1 percent foreclosure avoided versus 17.0 percent for vacant properties).
–NPLs on vacant homes had a much higher rate of foreclosure, more than double the foreclosure rate of borrower-occupied properties (73.9 percent foreclosure versus 27.6 percent for borrower occupied properties). Foreclosures on vacant homes typically improve neighborhood stability and reduce blight as the homes are sold or rented to new occupants.
–The average UPB of NPLs sold was $185,317.