GSE Serious Delinquency Rate is Lowest Since Start of Conservatorships

As a sign that mortgages backed by Fannie Mae and Freddie Mac are performing better is the consistent decline in the serious delinquency rate on residential loans insured by the GSEs, which is now at a level comparable to what it was in September 2008 at the start of the conservatorships.

According to the Federal Housing Finance Agency (FHFA)’s November 2015 Foreclosure Report released Tuesday, 1.50 percent of mortgages backed by the GSEs were seriously delinquent as of the end of November 2015, which is the lowest level since the conservatorships began. This percentage was less than half of the national average that CoreLogic reported for December, which was 3.1 pecent in that company’s National Foreclosure Report also released on Tuesday. The rate for both Fannie Mae- and Freddie Mac-backed loan has been steadily declining since 2010.

A decline in serious delinquencies for GSE-backed mortgage loans is concurrent with all the other declines in default-related metrics experienced by Fannie Mae and Freddie Mac in November. The GSEs completed 13,891 foreclosure prevention actions in November compared to 17,121 in October. Foreclosure prevention actions by the GSEs include loan modifications, repayment plans, forbearance plans, and charge-offs-in-lieu of foreclosure. The largest portion of those (8,569) were permanent loan modifications.

Foreclosure prevention actions have been on the steady decline for the last four years, concurrent with the decline of foreclosure sales and foreclosure inventory. The totals of foreclosure prevention actions on GSE-backed mortgage loans for the last four years are as follows: 541,219 in 2012; 447,728 in 2013; 307,218 in 2014; and 215,309 in 2015 through the end of November. This number includes home forfeiture ac,989,126tions, such as deeds-in-lieu of foreclosure and short sales as well as home retention actions.

As of the end of 2015, the GSEs are only 10,000 and change away from completing three million home retention actions since the star of 2009; the exact total of home retention actions completed is 2,989,126; the number of foreclosure prevention actions since 2009, including home forfeiture actions, was 3,626,692 as of the end of November 2015.

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