GSE Mod Numbers Fall, Presumably Due To HAMP Trial Mods

ted loan modifications on Freddie Mac and Fannie Mae mortgages dropped 12% in April to approximately 13,800 – a statistic that the Federal Housing Finance Agency (FHFA) suggests is the result of borrowers' entering into Home Affordable Modification Program trial mods. The FHFA's latest Foreclosure Prevention Report covers loss mitigation actions taken at the GSEs through April 30, almost two months after HAMP's introduction. HAMP modifications are treated as "completed" after a borrower successfully completes a three-month trial period. The FHFA report does, however, cover loan modification data under the agency's Streamlined Modification Program, which began last November and ended in April. According to the agency, loan modifications accounted for 48% of all completed foreclosure prevention actions in April, compared to 47% in March. Seventy-five percent of loans modified in April involved both rate reductions and term extensions, up from 73% in March. Completed short sales and deeds-in-lieu continued to increase, jumping 15% in April to nearly 4,000. That number stands almost three times higher than the short-sale and deeds-in-lieu volume one year earlier. Approximately 71,700 more loans became 60 days or more delinquent in April. Loans 60+ days delinquent increased approximately 7% in the month, to 1.2 million. Foreclosure starts were lower in April – 85,900, or about a 3% decline compared to March – as servicers began to temporarily suspend foreclosure actions on delinquent borrowers who pursued a modification under HAMP, while borrowers' eligibility was being determined. Foreclosure and third-party sales, meanwhile, increased to 14,200 in April, up from 9,300 in March. This finding was driven by sales of non-occupied properties and sales of owner-occupied properties already determined to be ineligible for HAMP, the FHFA says. SOURC

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