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50 NON-FORECLOSURE SOLUTIONS OUTPACE FORECLOSURES 4 TO 1 Approximately 421,000 homeowners used various non-foreclosure solutions from mortgage servicers in the second quarter of 2014, according to recently released Q2 2014 data from HOPE NOW, a private sector alliance between various players in the mortgage industry. e number of non-foreclosure solutions in Q2 was almost quadruple the number of foreclosure sales for the same period (115,000), according to HOPE NOW. Foreclosures experienced a quarter-over-quarter decrease of 9 percent (down from 126,000 in Q1). e foreclosure total for Q2 was the lowest for any quarter since HOPE NOW began reporting foreclosure data in 2007. e most popular non-foreclosure solution for Q2 was permanent loan modification, which approximately 116,000 homeowners utilized. Out of those, about 82,000 were proprietary loan modifications and about 34,000 were loan modifications processed through the Home Affordable Modification Program (HAMP). Other popular non-foreclosure solutions in Q2 were short sales, with numbers totaling close to 33,000 and deeds in lieu with a total of 7,561, according to HOPE NOW. Other non-foreclosure solutions such as repayment, retention, and liquidation plans made up the total of 421,000. HOPE NOW data shows the number of loan modifications declined quarter-over- quarter, however. e 116,000 loan modifications for Q2 represents a 13-percent decrease over Q1 (133,000). Short sales also ticked downward from Q1, falling 3 percent from 34,000 to 33,000. Deeds in lieu crept upward from 7,409 to 7,561, a slight increase of 2 percent quarter-over-quarter. "Since 2007, our members have offered over 20 million mortgage solutions, including more than 7 million permanent loan modifications," HOPE NOW executive director Eric Selk said. "HOPE NOW continues to engage all stakeholders on a daily basis, and our data reflects these efforts. For the balance of the year, we will remain focused on educating at-risk borrowers, assisting them with sustainable mortgage options, and working with our members to improve communication and institute best practices. Additionally, HOPE NOW members will continue to work with leaders and government agencies on a local level so that special attention can be given to the various markets around the country that still have the biggest housing-related issues." Loan modification has been steadily declining for the last year, according to HOPE NOW data, however. e Q2 total of 116,000 represents a huge drop of 43 percent from Q2 2013, when there were 204,000 loan modifications. ere was also a large drop year- over-year in the number of foreclosure starts from Q2 2013 to Q2 2014, going from 323,000 to 200,000, a change of 38 percent. Foreclosure sales declined 27 percent year-over-year from 158,000 to 115,000. HOPE NOW reports that since 2007, approximately 7.1 million permanent loan modifications have been completed in the U.S. Close to 5.7 million of those were proprietary loan modifications and nearly 1.4 million were done through HAMP. FHFA REQUESTS INPUT ON PROPOSED SINGLE SECURITY STRUCTURE In the first step of what is planned to be a multiyear effort, the Federal Housing Finance Agency (FHFA) has put out a request for industry input on the development of a common mortgage-backed security (MBS) designed to be issued and guaranteed by Fannie Mae or Freddie Mac. In its proposal, FHFA said the so-called "single security" will draw on the existing features of the Fannie Mae MBS and the Freddie Mac Participation Certificate (PC). Common features proposed for the security include a payment delay of 55 days, minimum pool submission amounts, and loan repurchase, substitution, and removal guidelines, among others. By creating a single common MBS, FHFA says it hopes to reduce trading value disparities between the two GSEs and boost liquidity in the secondary market. Currently, the two issue securities separately, with Freddie Mac historically trading less favorably on the market. In building the framework for the security, FHFA is specifically seeking input on how legacy securities would be handled, the risk of disrupting the market, and other potential industry impacts that could result. e agency is accepting comments until October 13. e development of the single security marks a major step in FHFA's plans for its conservatorship of Fannie and Freddie, part of which involves uniting the enterprises under a common securitization platform. In a statement, Andrew Bon Salle, EVP of single-family underwriting, pricing, and capital markets for Fannie Mae, said the company is committed to working with FHFA on transitioning to a common platform, noting that the development is likely to take some time. Dave Lowman, EVP of single-family business at Freddie Mac, also pledged the company's support, calling FHFA's request for input "a milestone on the path towards a more competitive and resilient housing finance system." "We share FHFA's vision of a more liquid and transparent single security that can make the secondary market even more efficient and keep homeownership within reach of America's working families," Lowman said. FHA COMMISSIONER TO STEP DOWN Less than two years after being confirmed as the head of the Federal Housing Administration (FHA), Commissioner Carol Galante announced plans to step down from her post. In a message sent to her staff, Galante revealed that she intends to depart from HUD by the end of this year, after which she will assume a distinguished professorship at the University of California, Berkeley, where she received her master's in city planning. She will also serve as the director of UC's Berkeley Program in Housing and Urban Policy and will co-chair the Fisher Center on Real Estate's Policy Advisory Board, according to the letter. Galante has been with HUD for five years, starting her career at the department as deputy assistant secretary for multifamily housing. She was nominated by President Obama for the role of FHA commissioner in 2011, receiving her confirmation from the Senate in late 2012, only a month after an audit revealed the agency's mortgage insurance fund had plummeted deep into the red as a result of losses it took following the housing bust. Despite efforts made to restore the fund, FHA was forced last year to take a $1.7-billion Treasury draw to strengthen its financial position.

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