Feds act to prevent foreclosures

  • Feds act to prevent foreclosures

WASHINGTON – A new report from the Federal Housing Finance Agency (FHFA) shows that Fannie Mae and Freddie Mac (“the Enterprises”) completed 26,910 foreclosure prevention actions in the first quarter of 2020.

That brought to 4.4 million the number of troubled homeowners who’ve been helped during conservatorships. Of these actions, 3.7 million of the foreclosure prevention actions helped troubled homeowners stay in their residences, FHFA announced in its 2020 Q1 Foreclosure Prevention and Refinance Report.

Ledgers of the Enterprises reflect that 311 of the foreclosure prevention actions occurred in Oklahoma, as of March 31. Those included:

• 91 repayment plans

• 15 forbearance plans (That is an agreement between the servicer and the borrower to reduce or suspend monthly payments for a defined period of time, after which the borrower resumes regular monthly payments and pays additional money toward the delinquency to bring the account current, or works with the servicer to identify a permanent solution, such as loan modification or a short sale, to address the deficiency.)

• 191 loan modifications

• 12 short sales and deeds-in-lieu (A deed-in-lieu is a loan for which the borrower voluntarily conveys the property to the lender to avoid a foreclosure proceeding. A short sale is the sale of a mortgaged property at a price that nets less than the total amount due on the mortgage (unpaid principal balance, accrued interest, advanced escrows, late fees and delinquency charges; the servicer and borrower negotiate payment of the difference between the net sales price and the total amount due on the mortgage.)

• Two other, unspecified, actions

As of March 31, Oklahoma accounted for 235,324 FHFA single-family loans and 6,171 of them were listed as being in arrears. Of those delinquent loans:

• 3,390 of the homeowners were late on their payments by 30 to 59 days.

• 882 homeowners were behind in their payments for 60 to 89 days.

• 722 had been delinquent for 90-179 days.

• 634 were delinquent for 180-364 days.

• 543 of the homeowners were tardy for a year or more. Other highlights of the 1st Quarter 2020

Foreclosure Prevention and Refinance Report included: 

Forbearance: Newly initiated forbearance plans rose to 170,533 in the first quarter of 2020, a 24-fold increase from 6,975 forbearance plans approved in the fourth quarter of 2019. A majority of those actions occurred as a result of the Enterprises’ response to COVID-19 impacts.

Loan modifications: Of the 16,773 loan modifications completed, 38% reduced borrowers’ monthly payments by more than 20%; a little under two-thirds, 64%, were extend-term only; and 23% were modifications with principal forbearance.

Foreclose starts and sales: 7,704 foreclosure sales and third party sales (in which a third party entity purchases a piece of property at a foreclosure sale/auction above the initial bid set by Fannie Mae or Freddie Mac) were completed, down 9% compared with the fourth quarter of 2019.

Foreclosure starts decreased 3%: from 30,010 in the fourth quarter of 2019 to 28,978 in the first quarter of 2020.

Refinances: Refinances totaled 747,464 in the first quarter of this year, an increase of 18,600 from the fourth quarter of last year.

The Enterprises’ serious (90 days or more) delinquency rate decreased to 0.64% at the end of the first quarter. This compared with 3.29% for Federal Housing Administration loans, 1.8% for Veterans Affairs loans, and 1.67% for all loans (industry average).

FHFA’s quarterly report also includes data on the Enterprises’ mortgage performance, delinquency, home forfeiture actions and refinances by state. FHFA publishes the report data in an online, interactive Borrower Assistance Map on FHFA.gov.