Loan Mods Fall at Fannie, Freddie as Late Payments rise

August 4, 2009 No Comments »

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Loan modifications fell for the second consecutive month in May at mortgage financiers Fannie Mae and Freddie Mac, according to the FHFA.

The pair, which hold or insure 30 million residential mortgages, completed just 10,400 loan modifications during the month as they focused on implementation of the HAMP.

Loan modifications accounted for 47 percent of all “completed foreclosure prevention actions” in May, with 62 percent reducing both mortgage rates and extending loan amortization.

But that’s down from 75 percent resulting in interest rate reductions and term extensions a month earlier.

Less favorable repayment plans fell for a third consecutive month and the out-of-favor Homesaver Advance continued its phase-out.

Unfortunately, delinquencies continue to rise, with approximately 80,100 more home loans becoming 60 days or more delinquent during the month, bringing the total to more than 1.3 million bad loans.

Meanwhile, foreclosure starts increased five percent to nearly 90,600, partially attributable to the processing of non-owner occupied homes and other properties deemed ineligible for HAMP.

Foreclosure and third-party sales increased to 19,300 in May, up from 14,200 in April, driven by sales of non-owner occupied properties.

Completed short sales increased three percent in May to almost 3,700, more than triple the volume seen a year ago.

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