Fannie Mae and Freddie Mac, the two government sponsored enterprises, reached the 2 million mark in their foreclosure prevention actions during the third quarter.  Nearly one million loan modifications have resulted from those actions

Foreclosure prevention activity picked up during the third quarter of 2011 with 171,067 actions taken compared to 167,629 in the second quarter.  Nearly half of the activity was loan modifications and two thirds of those reduced monthly payments for borrowers by more than 20 percent.  Foreclosure prevention activities by the GSEs during Quarters Two and Three were as follows:

During the quarter 22,602 trial modifications under the Home Affordable Modification Program (HAMP) were converted to permanent status bringing the total number of permanent modifications under HAMP to 380,312.  At the end of the quarter 42,279 borrowers remained in HAMP trial modification status, down from 50,923 at the end of the second quarter.

The two million foreclosure prevention actions taken by the two GSEs since they were put into conservatorship in August 2008 include 1,013,443 loan modifications (including the permanent HAMP modifications) and nearly a half-million repayment plans.  Home forfeitures, primarily short sales, have prevented foreclosure in 270,000 cases.

Over 90,000 homeowners took advantage of the Home Affordable Refinance Program (HARP) during Quarter 3, an increase of 11 percent over Quarter 2.  This brings the total number of underwater borrowers served by the program since its inception in 2009 to 928,570.   New criteria for HARP were announced on October 24 which will open the program to more borrowers and reduce the cost to homeowners and risk to lenders.  Freddie Mac and Fannie Mae have participated in over nine million refinances since April 1, 2009 including 1.6 million Streamlined refinances of their own loans

HAMP modifications continue to perform substantially better than loans modified in earlier periods.  Loans that are 60+ days delinquent nine months after they were modified represent 15 percent of modified loans compared to a 39 percent redefault rate in that time frame during the first quarter of 2008.  Seventy-two percent of HAMP loans are current and performing at the nine-months mark.

Serious delinquency rates (90+ days) declined during the quarter from 3.85 percent to 3.81 percent and 60+ plus delinquency was down one percentage point to 4.49 percent.  Early stage delinquencies - 59 days or less - grew from 2.04 percent to 2.07 percent.

Foreclosure activity dropped with foreclosure starts declining from 251,000 in the second quarter to 224,000 in the third and completed third-party and foreclosure sales dropping from 94,000 to 79,000.  REO inventories also eased with 182,212 properties on hand at the end of the period compared to 196,318 the previous quarter.  There were 69,572 property acquisitions during the period and 83,678 dispositions.  This was the fourth consecutive quarter that REO inventories have declined.