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AGENCY REVIEW A LOOK AT THE GSES' LATEST DELINQUENCY NUMBERS AND TOP HEADLINES 5.59% fannie single family freddie single family 5.07% February 2013 fannie » 3.13% freddie » 3.15% 4.55% 4.03% 3.51% 3.00% 2.48% note: Delinquent loans reported here include all single-family loans 90 or more days past due as a percentage of portfolio size. Historical data covers a moving 12-month period. Source: Fannie Mae February 2013 Monthly Summary and Freddie Mac February 2013 Monthly Volume Summary 1.96% 1.44% 0.92% 0.40% /13 02 /12 /13 01 12 /12 /12 11 /12 10 /12 08 09 /12 /12 07 /12 /12 06 05 /12 04 03 /12 /12 01 02 /11 /11 11 12 /11 /11 09 10 /11 /11 08 /11 07 /11 05 06 /11 /11 04 /11 02 03 GSEs Report Foreclosure Prevention and Refi Activities for 2012 Fannie Mae and Freddie Mac continue to administer foreclosure prevention efforts while experiencing declines in delinquencies, foreclosures, and REO inventories, according to a report from the Federal Housing Finance Agency (FHFA). The GSEs enacted 541,219 foreclosure prevention actions in 2012, contributing to a total of 2.7 million foreclosure prevention efforts since the two companies were taken over by the government in 2008, FHFA reported. GSE-backed homeowners who received loan modifications in the fourth quarter of last year saw an average reduction in their monthly mortgage payment of more than 30 percent. At the same time, the percentage of seriously delinquent loans at the GSEs fell from 3.39 percent in the third quarter of last year to 3.27 percent in the fourth. Over the year, delinquencies fell by a substantial 14 percent, 22 with FHFA reporting declines in every state except New Jersey and New York. Foreclosures fell about 3 percent and are now at their lowest level since the third quarter of 2008. The GSEs' REO inventory declined from about 158,000 properties in Q 3 2012 to about 155,000 in Q 4 2012. More than 32,600 short sales and deeds-inlieu were completed on GSE-backed properties in the last three months of 2012. Fannie and Freddie's short sale and deed-in-lieu actions totaled 141,500 for the full calendar year. Refinance volume under the Home Affordable Refinance Program (HARP) pulled back slightly in Q 4 2012, but data from FHFA indicates interest in the program remains high. The conservator's latest report to Congress shows HARP volume was 297,461 in the fourth quarter, representing 22 percent of the companies' total refi volume. According to FHFA, nearly 1.1 million HARP refinances were completed in 2012, bringing total volume to 2.2 million since the program's implementation in April 2009. FHFA also reported most HARP refinances since the program's inception have been on primary residences—1,895,827, in fact. Second homes comprised 69,522 HARP refinances, and 199,672 were for investment properties. Borrowers who refinance through HARP save an average of $83 per week, yet there are hundreds of thousands who are reluctant to take advantage, according to Tom Seidenstein, VP for financial markets and policy research in Fannie Mae's Economic and Strategic Research Group. After surveying HARP-eligible borrowers, Fannie Mae concluded common misconceptions about closing costs are keeping borrowers from the federal program. Thirty-four percent of respondents said they had not refinanced their mortgages under HARP because closing costs are too high; this was the most commonly cited reason for not taking advantage of today's lower interest rates. The idea of having to take out another 30-year loan hindered 33 percent of respondents, while 24 percent said they receive too many mailings or offers to take any seriously. Some borrowers were wary of lenders, with 22 percent stating they did not trust the lender who contacted them. For 20 percent of borrowers, it was a matter of too much paperwork. Among borrowers who were deeply underwater, or those with loan-to-value ratios exceeding 125 percent, 38 percent said they had not explored a HARP refinance because their home has lost value so they assumed they would need to pay additional money to refinance. Another 28 percent said they didn't think they would be able to qualify. Fannie says both are common misconceptions. Between 2009 and November 2012, Fannie Mae has refinanced more than 8.9 million mortgages, including nearly 1.2 million loans refinanced through HARP. KNOW THIS On April 11, the Federal Housing Finance Agency announced a two-year extension to the Home Affordable Refinance Program (HARP), making it effective until December 31, 2015.

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