Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing

Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing
RISMEDIA, April 17, 2009-Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008.

The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.

“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”

The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.

The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:

• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.

As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.

Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.

When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.

For more information, visit www.fanniemae.com or www.freddiemac.com.

Using Technology to Your Advantage - Social Networking Connects Agents with Homebuyers

RISMEDIA, April 9, 2009-Facebook, Twitter and YouTube are among the social networking options used by the real estate industry to connect with consumers who are seeking a combination of technology and human touch. The national meeting of the Real Estate Services Providers Council (RESPRO), a national non-profit trade association of real estate broker-owners, real estate franchisers, mortgage lenders, title insurers and agencies, homebuilders, home service and settlement providers united to deliver cost efficient services to consumers through strategic alliances across the home-buying industry, found leaders sharing new strategies to reach “echo-boomers” heavily using computers to research home sales.

Sherry Chris, president and CEO of Better Homes and Gardens Real Estate, said 80% of consumers now use the Internet to research homes and a real estate agent to complete the transaction.

“Tomorrow’s consumer will want to visit sites with as much information as possible.” Chris said. “It will be a combination of the consumer and agent using technology. People are looking for the new opportunity, the new way and help from technology. ”

“[Real estate] companies who [also] have mortgage and title companies are going to be the survivors,” Champion Realty president and CEO Jon Coile said. “The ones who don’t are not.”

For more information, visit http://www.respro.org/.