Foreclosure prevention actions by Fannie and Freddie are leading to less blight around the country. Is it enough?

 

We’ve heard a lot about how federally-controlled Fannie Mae and Freddie Mac are not doing enough to keep people in their homes, but according to a Federal Housing Finance Agency (FHFA) report released last week, the GSEs are making good headway when it comes to foreclosure prevention. The report indicates that Fannie and Freddie together enacted 541,219 “foreclosure prevention actions” in 2013. A foreclosure prevention action can be a loan modification, a short sale, or a deed-in-lieu transaction[1]. Since 2008, the GSEs have enacted 2.7 million foreclosure prevention actions, 1.3 million of which have been permanent loan modifications, and the federal Home Affordable Modification Program has contributed more than 500,000 permanent loan modifications to the number.

In the fourth quarter of 2012 alone, the GSEs assisted 130,000 homeowners with foreclosure prevention[2]. 97,689 of those actions were loan modifications, repayment and forbearance plans, and short sales. The remainder consisted of deed-in-lieu transactions. 46 percent of homeowners whose loans were modified in Q4 2012 had monthly payments reduced more than 30 percent.

by Carole VanSickle