The government-sponsored enterprises sold fewer nonperforming loans in the first half, but the drop-off in the number of sales year-to-year is less severe than it was in 2017 as a whole.
Fannie Mae and Freddie Mac sold 7,140 nonperforming loans during the period, down almost 28% from the first half of 2017, according to the Federal Housing Finance Agency's latest report.
In comparison, NPL sales were down more than 58% year-to-year in
The first-half 2018 sales left the GSEs with 77,201 portfolio loans on which borrowers have failed to pay for a year or more. Fannie and Freddie sold just 8% of their total nonperforming loans during the first half of this year.
In comparison, during 2017, the GSEs sold 15% of the NPLs in their portfolio. In 2016, when Fannie and Freddie's NPL sales peaked, they sold off 22% of the nonperforming loans they held.
NPLs sold by the GSEs in the first half of 2018 had an average delinquency rate of more than three years, and an average loan-to-value ratio of 95%, exclusive of arrearages. More than half of the NPLs in the GSEs' portfolios have remained unpaid for a year or more, but less than two years.
Fannie and Freddie were able to avoid foreclosing on more than 28% of occupied-property loans by using loss-mitigation strategies like modifications, short sales, full repayment or deed-in-lieu.
The GSEs found foreclosure alternatives for almost 13% of loans secured by vacant properties. Almost 66% of these loans went into foreclosure.
