On Thursday, the Federal Housing Finance Agency (FHFA) shared its findings for the third quarter of 2024, revealing that it had carried out 43,459 foreclosure prevention interventions.
This brings the total support extended to homeowners during the conservatorship of government-sponsored enterprises (GSEs) since 2008 to over 7 million.
However, these efforts coincided with a striking 27% rise in foreclosure initiations, bringing the total to 22,025 for the quarter.
Foreclosure Prevention and Refinancing Activities
This data comes from the FHFA’s report on foreclosure prevention and refinancing activities for Q3 2024.
Among the highlights, 35% of the loan modifications completed over these three months helped borrowers achieve average reductions of more than 20% in their monthly mortgage payments.
The number of loans that were refinanced also saw a healthy uptick, with an increase of 9,214 refinances, securing a total of 98,785 for the quarter.
Delinquency Rates and Forbearance
While the GSEs reported a slight uptick in serious delinquency, which now sits at 0.53%, this is still a positive sign compared to loans backed by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA), which have rates of 3.63% and 2.26% respectively.
The overall industry average stands at 1.55%, illustrating the relative stability of the GSEs in the current market.
As of September 30, the GSEs had 39,669 loans in forbearance, which equates to roughly 0.13% of their single-family conventional portfolio.
This marks an increase from 31,827 loans (0.1%) recorded at the end of June.
Notably, about 1% of these loans have been in forbearance for over a year.
Trends in Mortgage Rates
The delinquency rate also climbed slightly, with loans overdue by 60 days or more rising to 0.75%, up from 0.7% in the previous quarter.
This increase aligns with the 27% surge in foreclosure starts, as well as a 3.2% uptick in third-party and foreclosure sales, totaling 3,039.
In its report, the FHFA highlighted a rise in refinancing activity during Q3 2024, attributing this trend to decreasing mortgage interest rates, although they remain above the levels seen in 2021.
Specifically, the average rate for a 30-year fixed mortgage dropped from 6.92% in June to 6.18% by September.
Interestingly, cash-out refinances, which previously accounted for as much as 82% of all refinances over the past three years, fell to 59% by September.
This change suggests that as mortgage rates have subsided, more borrowers are seizing the opportunity to refinance without extracting cash, effectively lowering their monthly payments instead.
Source: Housingwire