The Federal Housing Finance Agency’s (FHFA) fourth-quarter 2020 Foreclosure Prevention and Refinance Report shows that Fannie Mae and Freddie Mac completed 362,912 foreclosure prevention actions in the quarter, bringing the total number of homeowners who have been helped during conservatorships to 5,588,000.
The report also shows that 30 percent of loan modifications completed in the fourth quarter reduced borrowers’ monthly payments by more than 20 percent. The number of refinances increased from 1.76 million in the third quarter to 2.01 million in the fourth quarter.
The GSEs’ serious delinquency rate dropped from 3.14 percent to 2.78 percent at the end of the quarter. This compares with 11.19 percent for Federal Housing Administration (FHA) loans, 5.96 percent for Veterans Affairs (VA) loans and 5.03 percent for all loans (industry average).
The total number of loans in forbearance continued to trend downward since its peak in May as initiated forbearance plans decreased, but remained elevated through the fourth quarter (compared with pre-pandemic levels). As of December 31, there were 804,559 loans in forbearance, representing approximately 2.8 percent of the GSEs’ single-family conventional book of business, down from 1,045,808 – or 3.7 percent – at the end of the third quarter.
The 60-plus-days delinquency rate decreased from 3.58 percent at the end of the third quarter to 3.07 percent at the end of the fourth quarter. The delinquency rate remained elevated as a result of the COVID-19 pandemic and the forbearance programs being offered to affected borrowers.
The number of foreclosure starts dropped 7 percent, from 6,809 in the third quarter to 6,302 in the fourth quarter. Also, the GSEs’ REO inventory declined 16 percent, from 11,614 in the third quarter to 9,739 in the fourth quarter.
The total number of property acquisitions decreased 7 percent to 1,141, while dispositions decreased 41 percent to 3,017 during the quarter.