'Repayment Plans' Dominate GSE Loan Mod Efforts

Fannie Mae and Freddie Mac increased the pace of loan modifications in the fourth quarter, but repayment plans continue to represent over 75% of the GSEs' workout efforts, according to a Federal Housing Finance Agency report. The GSEs completed nearly 23,780 loan modifications in the fourth quarter, compared to 13,500 in 3Q. In December, the GSEs initiated 29,100 workout plans compared to 8,700 loan modifications. The FHFA report shows Fannie is continuing to deploy its 'HomeSaver Advance' program, which allows the agency to make small, unsecured loans to homeowners so they catch up on their payments. These advances immediately cure delinquent loans and Fannie does not have to absorb the cost of purchasing the loans out of securitized pools. Fannie made 9,300 HomeSaver advances in December, compared to 8,760 in September when the GSEs were was placed in conservatorships. Freddie does not have a similar program. Meanwhile, GSE loans 90 days or more past due (including those in bankruptcy and foreclosure) rose to 2.14% in December from 1.52% in September. "When adjusted for the suspension of foreclosure sales, the rate would have been 2.1%," the GSE regulator said. Fannie and Freddie suspended foreclosure sales in late November and December for the holidays.