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GSE FORECLOSURE PREVENTION ACTIONS TALLY 2.3M Fannie Mae and Freddie Mac completed nearly 2.3 million foreclosure prevention actions from the start of their conservatorship to the end of March, according to a first-quarter foreclosure prevention report issued by the Federal Housing Finance Agency (FHFA). The report showed that more than 1.9 million of the foreclosure prevention actions undertaken by the GSEs and their servicers— including 1.1 million permanent loan modifications—have helped borrowers keep their homes. Moreover, half of borrowers who received loan modifications in Q1 2012 had their monthly payments reduced by more than 30 percent, with one-third of those including principal forbearance. Performance of modified loans is also strong, with less than 15 percent of loans modified in Q2 2011 missing two or more payments. In other modification news, both enterprises found that loans modified through HAMP performed better after modification than nonHAMP modified loans. Nine months after modification, the rate of 60-plus-day delinquent loans modified through HAMP was up to 15 percentage points lower than the re-default rate for non-HAMP modifications. FHFA also reported that mortgage performance continued to improve in the first quarter of 2012 as early-stage (between 30 and 89 days) and serious delinquency rates declined. The percentage of loans 30–59 days delinquent fell from 2.11 in Q 4 2011 to 1.72 percent in Q1 2012, while loans 60-plus days delinquent fell from 4.46 percent to 4.15 percent. The percentage of seriously (90-plus days) delinquent loans dropped from 3.78 percent to 3.61 percent. Foreclosure starts in 2012's first quarter increased for the first time since Q 3 2010, moving up to 226,000 from 218,000 in the previous quarter. Third-party and foreclosure sales fell slightly between quarters from 80,000 to approximately 79,000. REO inventory declined from 72,014 to 71,505 as property dispositions increased (77,104 from 75,163) and acquisitions decreased (173,464 from 179,063) in the first quarter. According to the report, more than half of seriously delinquent borrowers had missed more than a year of mortgage payments. NO EXCUSES. JUST RESULTS. The highest level of customer satisfaction. Services www.GeherenLaw.com • Foreclosures • Creditor's Rights/ Bankruptcy • REO Services • Loss Mitigation • Deficiency Judgments/ Collections • Evictions • Defensive Litigation • Title Services & Title Insurance Providing unmatched, intelligent and effective legal services throughout the State of Georgia. THE GEHEREN FIRM, PC 4828 Ashford Dunwoody Road | Second Floor | Atlanta, GA 30338 678.587.9500 Office | 678.587.9098 Fax 24 FHA DROPS $1,000 DEBT RULE THAT WOULD HAVE DELAYED CLOSINGS On July 1, borrowers wanting to take out a loan insured by the Federal Housing Administration (FHA) would have potentially experienced a closing-day delay of three months or more if they had debt totaling or exceeding $1,000. Two weeks before it was to take effect, the FHA "credit-dispute" rule was withdrawn. A HUD spokesperson said in an email that the decision to rescind the earlier proposal, which was first announced in February, was based on input received. "We plan to issue a new [mortgagee letter] shortly, which will be more clear in our effort to manage risk on this issue without the unintended consequence of denying mortgage financing to otherwise qualified borrowers," the spokesperson said. According to the old guidance, "[i]f the credit report reveals that the borrower is disputing any credit accounts or public records, the mortgage application must be referred to a [direct endorsement] underwriter for review." In other words, an FHA spokesperson explained, it will "get a human eyeball" to more fully understand what happened. The rescinded proposed policy would have required a borrower to either cure the collections debt before closing or resolve the debt through a repayment plan maintained for a minimum of three months before closing. The proposal was originally introduced to lower credit default. In April, FHA-insured loans accounted for 28 percent of new loans, according to Ellie Mae's Origination Insight Report. Overall, FHA currently has 4.8 million insured single-family mortgages, the agency stated on its website. KNOW THIS Loans liquidated from private mortgage-backed securities in June spent an average of 27.4 months in the liquidation pipeline (17.1 months in delinquency, 7.8 months in foreclosure, and 2.5 months in REO), Amherst Securities reports.

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