Big Drop in Fannie, Freddie Loan Mods

By:: Peter King | December 21, 2010

Mortgage loan modifications by Fannie Mae and Freddie Mac fell off sharply during the third quarter of the year, with ongoing activity down by more than half.

Only 35,400 mortgages held by the two agencies were approved for permanent loan modifications under the government’s Home Affordable Modification Program (HAMP) in the third quarter of 2010, down from 88,600 during the previous three months. Meanwhile, the total number of Fannie and Freddie mortgages in HAMP trial modifications fells to 88,200, down from 202,400 in the second quarter of the year.

That leaves a difference of at least 79,000 trial modifications that were cancelled, and likely more when new trial modifications are taken into account. The figures are from a newly released report from the Federal Housing Finance Agency, which oversees the two government-sponsored enterprises (GSEs), as Fannie Mae and Freddie Mac are commonly referred to.

At the same time, the agency reports that GSE-backed mortgages that were modified in the past three quarters are performing better than those modified earlier, with less than 10 percent 60-days delinquent three months after modification.

Although loan modification activity fell off sharply during the quarter, government-backed mortgage refinancing was up significantly. An additional 100,000 GSE mortgages were refinanced through the government’s Home Affordable Refinance Program (HARP) during the quarter, bringing the cumulative total since the program was launched in March 2009 to 480,000.

By comparison, only 260,000 GSE mortgages have been approved for permanent HAMP loan modifications during the same period.

The quarter also saw an increase in early-stage mortgage delinquencies, even as more serious delinquencies declined. Mortgages past due by 30-59 days increased to 2.28 percent of all loans serviced, up from 2.19 percent in the second quarter of the year. Meanwhile, mortgages 60-89 days past due fell to 5.06 percent of the GSE portfolios, down from 5.36 percent before, and mortgages seriously delinquent (90 days plus) or in foreclosure fell to 4.26 percent, down from 4.58 percent in the second quarter of 2010.

Foreclosure activity on GSE mortgages increased 23 percent during the quarter, with 339,000 new foreclosures begun and 139,000 homes sold in foreclosure or in third-party sales.

Call For Rates

800-419-1494

Speak to a lender now.

We will match calls to our toll free number with our network of lenders.

Modify My Loan

National Rates

Loan Type	Today	+/-
30 yr fixed	3.78
15 yr fixed	3.06
5/1 ARM	2.69

Rates may contain points

Compare Rates »

Browse Mortgage Rates

Featured Guides

Browse our comprehensive guides to popular topics related to mortgage and personal finance.

Loan Modification Calculators

Mortgage Loan Directory and Information, LLC or Mortgageloan.com does not offer loans or mortgages. Mortgageloan.com is not a lender or a mortgage broker. Mortgageloan.com is a website that provides information about mortgages and loans and does not offer loans or mortgages directly or indirectly through representatives or agents. We do not engage in direct marketing by phone or email towards consumers. Contact our support if you are suspicious of any fraudulent activities or if you have any questions.

Mortgageloan.com is a news and information service providing editorial content and directory information in the field of mortgages and loans. Mortgageloan.com is not responsible for the accuracy of information or responsible for the accuracy of the rates, APR or loan information posted by brokers, lenders or advertisers.