Fannie, Freddie serious delinquency rate continued to dip in 2Q

Fannie Mae and Freddie Mac completed a total of 96,952 foreclosure prevention actions during the second quarter of 2022, according to a quarterly report published by the Federal Housing Finance Agency on Thursday.

The number of foreclosure prevention actions dipped by 25% in the second quarter compared to the first. Of those taken by the government-sponsored enterprises, 41,508 were payment deferrals and 38,264 were permanent loan modifications. 

In total, 90,889 GSE loans were in forbearance at the end of the second quarter, representing .3% of the loans serviced and 17% of the total delinquent loans. 

From April to June 30, initiated forbearance plans slid to 41,054 from 59,778 the previous quarter. Foreclosure starts also declined 6% to 19,388, while foreclosure sales increased 3% to 3,458 in the second quarter. 

Fannie Mae’s and Freddie Mac’s seriously delinquent rate dropped by 17 basis points to 0.79% at the end of the second quarter, the FHFA said. Meanwhile, the seriously delinquent rate among other housing agencies remained significantly higher, with the Federal Housing Administration and Department of Veterans Affairs reporting 4.64% and 2.83%, respectively. 

The percentage of GSE loans that were in the 30 to 59 days delinquent category increased to 0.78% , but loans late by 60 days or more dropped to 0.92%. 

Since the start of the conservatorship in 2008, the GSE’s helped 5.9 million borrowers stay in their homes, the FHFA said. Of that sum, 2.6 million borrowers received permanent loan modifications and 703,952 of the actions resulted in short sales and deeds-in-lieu.

FHFA’s quarterly report also showed that a mere 444,852 loans were refinanced by the GSE’s in the second quarter compared to 899,518 loans in the previous quarter. The agency said that higher interest rates contributed to lower refinance activity.

The report added that borrowers refinancing into shorter term 15-year fixed rate mortgages also slowed by 18% in May.