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83 83 83 INVESTMENT GOVERNMENT PROPERTY PRESERVATION FHFA RELEASES Q2 FORECLOSURE PREVENTION REPORT e Federal Housing Finance Agency's (FHFA) latest Foreclosure Prevention, Refinance, and Federal Property Manager's Report for July 2022 revealed the total number of loans in forbearance continued to trend downward since its peak in May 2020 but remained elevated through July 2022—compared with pre-pandemic levels. Data found that as of July 31, there were approximately 84,385 loans in forbearance, representing an estimated 0.27% of the Enterprises single-family conventional book of business. is number is down from 90,889 or 0.29% at the end of June, while roughly 6% of these loans have been in forbearance for more than 12 months. Highlights: The Enterprises' Foreclosure Prevention Actions » e Enterprises completed 23,874 foreclosure prevention actions in July, bringing the total to 6,614,876 since the start of the conservatorships in September 2008. Approximately 39% of these actions have been permanent loan modifications. » ere were 8,925 permanent loan modifications in July, bringing the total to 2,591,941 since the conservatorships began in September 2008. » Approximately 65% of loan modifications in July include reduce rates and extend- term. Modifications with principal forbearance accounted for 11% of all loan modifications during the month. » e number of borrowers who received payment deferrals after completing a COVID-19-related forbearance plan decreased by 17% from 12,816 in June to 10,631 in July. » Initiated forbearance plans increased from 14,410 in June to 13,453 in July. e total number of loans in forbearance decreased from 90,889 at the end of June to 84,385 at the end of July, representing approximately 0.27% of the total loans serviced, and 16% of the total delinquent loans. e Enterprises' Mortgage Performance » e 30-59 days delinquency rate increased to 0.84% while the serious delinquency rate declined to 0.75% at the end of July. e Enterprises' Foreclosures: » ird-party and foreclosure sales decreased to 1,176 while foreclosure starts declined to 5,424 in July. Refinance Activities » Total refinance volume decreased in July 2022 amid rising mortgage rates through June. Mortgage rates fell in July: the average interest rate on a 30-year fixed-rate mortgage decreased to 5.41% from a July level of 5.52%, representing levels last observed in 2008. » e percentage of borrowers refinancing into shorter-term 15-year fixed-rate mortgages decreased to 17% in July, with borrowers finding the greater monthly affordability of 30-year fixed-rate mortgages amid rising rates more attractive than the increased interest rate savings of 15-year fixed-rate mortgages which inched toward 1%. New data also found the percentage of cash-out refinances increased to 81% in July, continuing an increase in earlier months. Rising mortgage rates have decreased the opportunities for non-cash-out borrowers to refinance at lower rates and lower their monthly payments. e percentage of borrowers refinancing into shorter-term 15-year fixed-rate mortgages decreased to 17% in July as the difference between 15- and 30-year fixed-rate mortgages increased in 2022. While the interest rate savings of a 15-year fixed mortgage over a 30-year mortgage has increased, the sharp rise in mortgage rates since December has acted as an additional disincentive against the higher monthly cost of a 15-year fixed rate mortgage compared to the greater monthly affordability of 30-year fixed rate mortgage.