Monday, October 22, 2018

FHFA Report on Foreclosure Prevention

Are foreclosure prevention methods working? According to a recent article in, the Federal Housing Finance Agency (FHFA) recently issued a new Foreclosure Prevention Report, which details recent foreclosure actions completed by Fannie Mae and Freddie Mac. The key information from the report is that Fannie Mae and Freddie Mac continue to complete tens of thousands of foreclosure prevention actions, and a high number of these are permanent loan modifications that allow homeowners to continue making lower payments on their mortgages for the life of the loan (which ultimately allows more homeowners to stay in those properties).
Even though the foreclosure crisis is now an issue that we discuss in terms of the recent past, homeowners in Oak Park and throughout the country continue to struggle with monthly mortgage payments. It is important for those homeowners to know that there may be options available to them to remain in their homes even if mortgage payments have become unmanageable.
Details of the Foreclosure Prevention Actions
What are some of the specific foreclosure prevention actions detailed in the report? In July 2018, the most recent period for data, “Fannie Mae and Freddie Mac completed just over 24,000 foreclosure prevention actions.” That number was slightly lower than the foreclosure prevention actions for June 2018, which totaled 25,363. In total, however, “since the beginning of the conservatorship in September 2008,” the government-sponsored enterprises have completed a total of 4,203,611 foreclosure prevention actions (or, in other words, more than 4.2 million).
More than half of those 4.2 million foreclosure prevention actions were permanent loan modifications. In July 2018, there were 18,874 permanent loan modifications, which means that Fannie Mae and Freddie Mac have completed a total of 2,254,644 permanent loan modifications since September 2008. The other types of foreclosure prevention actions include principal forbearance (about 22% of loans), and mortgage modifications that with extend-terms (about 56%).
What types of properties most often receive modifications? About 94% of the modifications are for primary residences, about 4% are for investment properties, and about 2% are for second homes.
Learning More About Foreclosure Prevention
In addition to foreclosure prevention actions taken by Fannie Mae and Freddie Mac, the FHFA report indicated that the number of short sales and deeds-in-lieu of foreclosure declined by 11% between June and July 2018, and the rate of “serious delinquency” also declined slightly. Short sales and deeds-in-lieu of foreclosure often are alternatives for homeowners who want to avoid foreclosure if they cannot find another way to stay in the property.
Given that subprime mortgages are no longer the major cause of foreclosures as they were during the crisis, what is driving new foreclosures? The report suggests that “23% of all delinquencies stem from a curtailment of income, which continues to be the top cause for delinquencies in general.” Other reasons for new foreclosures include unemployment, illness, and marital problems.
Contact an Oak Park Foreclosure Defense Attorney
If you have questions about avoiding foreclosure or if you want to learn more about foreclosure prevention, an experienced Oak Park foreclosure defense lawyer can speak with you today about options that may be available to you. Contact the Emerson Law Firm for more information.
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