It began simply. The laundry washer breaks down and a repair company is called to fix it.
Fannie/Freddie loan modifications for October/November were up by 50%
James B. Lockhart, director of the Federal Housing Finance Agency
today released the November 2008 monthly Foreclosure Prevention Report, which provides
comprehensive monthly data on the loss mitigation efforts of Fannie Mae and Freddie Mac
as well as information on delinquencies, foreclosures initiated and foreclosures completed.
“Loan modifications for October and November, which were the first two full months of the
conservatorship, increased by 50 percent from the previous two months,” said
Lockhart. “These data reflect the increased commitment of the servicers and the GSEs to
help borrowers in trouble modify their loans to keep them in their homes.”
During November, both Enterprises announced a suspension of foreclosure sales and
evictions scheduled to occur from November 26 through January 9 on single-family
properties. The moratorium was extended to Saturday, January 31. The extension allowed
servicers additional time to work with borrowers in foreclosure. Specifically, they targeted
eligible borrowers for the Streamlined Modification Program (SMP) announced November
11 and implemented December 15. Because only two business days of foreclosure activities
in November were impacted by the suspension, it had little effect on the month’s
performance. However, it is expected the impact of the suspension will be greater for
performance to be reported for December and January.
The report shows that as of November 30, 2008 of the Enterprises’ 30.6 million residential
• Loans 60+ days delinquent (including those in bankruptcy and foreclosure) as a
percent of all loans increased from 1.46 percent as of March 31, 1.73 percent as of
June 30, and 2.21 percent as of September 30 to 2.39 for October and 2.73 percent
• Loans 90+ days delinquent (including those in bankruptcy and foreclosure) as a
percent of all loans increased from 1.00 percent as of March 31, 1.19 percent as of
June 30, 1.52 percent as of September 30 to 1.67 percent for October and 1.88
percent for November.
• Loans for which foreclosure was started as a percent of loans 60+ days delinquent
declined from 8.29 for the first quarter, 7.81 percent for the second quarter, 7.20
percent for the third quarter to 6.44 percent for October 2008 and 5.25 percent for
• Loans for which foreclosure was completed as a percent of loans 60+ days
delinquent decreased from 2.41 percent for the first quarter, 2.55 percent for the
second quarter, 2.56 percent for the quarter to 2.33 percent for October and 1.73
percent for November.
• Modifications completed increased from a monthly average of 2,883 for 2007,
5,218 for the first quarter, 5,129 for the second quarter and 4,497 for the third
quarter to 5,600 for October and 8,291 for November. Compared with the monthly
average of 4,948 for the first nine months of 2008, October modifications increased
by 13.2 percent and November by 67.6 percent.
• The loss mitigation ratio for November was 61.7 percent – the highest since June
2008, which was reported at 64.8 percent. The year-to-date loss mitigation ratio is
55.2 percent. The loss mitigation ratio is calculated as the total mitigation activities
(payment plans, delinquency advances, loan modifications, short sales, deeds in
lieu, assumptions, and charge-offs) divided by the total of loss mitigation activities
plus foreclosures completed and third-party sales. This ratio allows for comparison
of loss mitigation performance over time – irrespective of delinquency rates.
Read the full report here.
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $6.3 trillion in funding for the U.S. mortgage markets and financial institutions.