The Federal Housing Financing agency reported there have now been over a quarter million permanent mortgage loan modifications for Freddie Mac and Fannie Mae mortgages arranged under the Home Affordable Modification Program. While it was substantially below the 88,600 permanent modifications achieved during Quarter II, 35,400 trial modifications were converted to permanent status in the third quarter, bringing the total to 260,000 over the 18 months since the program began.
FHFA's Third Quarter 2010 Foreclosure Prevention and Refinance Report issued on Monday includes information on all of the foreclosure prevention efforts undertaken by the two government sponsored enterprises (Enterprises) Freddie Mac and Fannie Mae, including HAMP, the Home Affordable Refinance Program (HARP,) and other foreclosure prevention actions.
Completed foreclosure prevention actions of all types were down 16 percent during the quarter to a total of 227,300. Most of the decrease came from the numbers of modifications - down 14 percent from 171,176 to 146,507, mostly attributable to HAMP - and repayment plans which decreased from 46,353 to 33,964.
Much of the backlog of borrowers who earlier seemed more or less stuck in HAMP trial modifications has been cleared out in recent months. There are now 88,197 Enterprise borrowers in trial status compared to 202,408 at the end of the second quarter. Under HARP a total of 479,894 mortgages have been refinanced since the Enterprises were put into federal conservatorship, a 26 percent increase from the cumulative number at the end of Quarter Two. There were 29,465 short sales completed by the Enterprises in Q3 compared to 29,375 in Q2.
Foreclosure starts and completed third-party and foreclosure sales increased 23 percent quarter over quarter with 339,000 starts and 138,100 sales.
Loans modified in the first three quarters of 2010 are performing substantially better in the first three months after modification than has been the experience in earlier periods. FHFA reports that less than 10 percent of loans modified in the last three quarters (beginning in Q4 2009) were 60 or more days delinquent three months after modification. Prior to the fourth quarter last year the three month 30-day delinquency rate was in double digits - at 19 percent in Q3 2009. While only two quarters of data is available for the 60-day rate, it is equally impressive. During the first three quarters of 2009 the rate was over 30 percent. In Q4 2009 and Q1 2010 it has averaged 15 percent.
The short term delinquency rate in the Enterprise portfolios increased slightly from 2.19 percent to 2.28 percent during the third quarter but longer term delinquencies were down. Loans that were 60+ days delinquent declined for the third consecutive quarter. There were nearly 110,000 fewer loans in that bucket, bringing the delinquency rate down from 5.36 percent in the second quarter to 5.06 percent. Days 90+ days overdue or in foreclosure were down from 4.58 percent to 4.26 percent.
