GSE foreclosure prevention actions: fourth quarter 2020 update

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According to the latest Federal Housing Finance Authority (FHFA) foreclosure prevention and refinancing report for the fourth quarter of 2020, Fannie Mae and Freddie Mac (GSE) completed 362,912 fourth quarter foreclosure prevention actions , bringing the total to 5,588,253 since the start of the guardianship in September 2008. Of these actions, 4,886,910 have helped homeowners in difficulty stay in their homes, including 2,440,966 permanent loan modifications.

The forbearance plans launched fell to 179,644 in the fourth quarter, compared to 230,714 in the third quarter. The total number of loans with forbearance plans at the end of the quarter was 804,559, which represents approximately 2.8% of total loans under management and 69% of total loans in arrears.

According to the latest Mortgage Bankers Association (MBA) forbearance and call volume survey, approximately 2.5 million homeowners are now on a forbearance plan as of March 14, 2021.

In Q4, 14% of the changes were major abstention changes. Term extended changes accounted for only 70% of all loan changes in the fourth quarter. During the fourth quarter, 823 short sales and deeds in lieu were concluded, bringing the total to 701,343 since the start of GSE’s supervision in September 2008.

In Q4, the GSEs carried out 362,089 home support actions, against 538,527 in Q3, including 9,347 permanent loan mods; 7,199 repayment plans; 160,262 abstention plans; 185,112 payment deferrals; and 169 write-offs in lieu, helped delinquent borrowers stay at home in the fourth quarter.

Black Knight recently reported that after eight straight months of improvement, the national mortgage delinquency rate edged up in February, from 5.85% to 6.0%.

GSEs completed 9,347 loan mods in the fourth quarter, down 13% from the third quarter. Fannie Mae’s standing loan changes were down 13% to 5,757 and Freddie Mac’s were down 14% to 3,590 in the fourth quarter.

Foreclosure starts fell 7.0% to 6,302, while third-party and foreclosure sales rose 8.0% to 1,933 in the fourth quarter.

The FHFA also reported that total refinancing volume fell in the fourth quarter but continued in record territory as mortgage rates fell further in December, the average interest rate on a fixed rate mortgage (FRM ) of 30 years falling to 2.68% against 2.77. % in November. According to Freddie Mac’s latest Primary Mortgage Market Survey (PMMS), the 30-year FRM is currently averaging 3.17%.

As rates rise, are more Americans excluded from their ability to refinance?

The rate hike “leaves potential buyers with less purchasing power. Unfortunately, this has disproportionately affected the lower end of the market, where supply is the lowest, ”Khater said. “During the pandemic, ‘housing’ has become more important. than ever. As a result, the strong buying demand continues, but the buyers also outnumber the sellers. “

Click here to view the FHFA Fourth Quarter Foreclosure Prevention and Refinancing Report.

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