Report also highlights data on forbearance, foreclosure, and delinquency rates
The Federal Housing Finance Agency (FHFA) has released its latest Foreclosure Prevention and Refinance Report, revealing that the mortgage performance of Fannie Mae and Freddie Mac loans improved slightly in the fourth quarter of 2022.
Fannie Mae and Freddie Mac completed over 52,000 foreclosure prevention actions in the fourth quarter of 2022. According to the report, 37% of loan modifications completed in Q4 reduced borrowers' monthly payments by more than 20%. However, the number of refinances decreased from 194,189 to 111,251 quarter over quarter amid rising mortgage rates.
As of December 31, there were 81,173 loans in forbearance, representing 0.26% of Fannie and Freddie's single-family conventional book of business – up from 78,432 or 0.25% in the third quarter. About 3% of these loans have been on a forbearance plan for over 12 months.
The report also shows a decline in the enterprises' serious delinquency rate, down to 0.65% at the end of Q4. That's compared to a 4.40% delinquency rate for Federal Housing Administration (FHA) loans, 2.43% for Veterans Affairs (VA) loans, and 1.89% for all loans (industry average). The 60+ day delinquency rate increased slightly from 0.83% in Q3 to 0.84% in Q4.
"The delinquency rates remained slightly higher than pre-coronavirus rates due to the forbearance programs offered to borrowers affected by the pandemic," the FHFA noted.
Meanwhile, forbearance plans increased, and REO inventory jumped 7% to 10,997 in the fourth quarter as REO acquisitions outpaced property dispositions. The total number of property acquisitions fell 9% to 1,706, while dispositions dropped 2% to 977 during the quarter.
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