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29 » VISIT US ONLINE @ DSNEWS.COM GSEs ANNOUNCE LOWEST EVER INTEREST RATE ON MORTGAGE MODIFICATIONS Fannie Mae and Freddie Mac recently announced that the standard mortgage modification interest rate will be under 4 percent for the first time ever since the benchmark was established in January 2012. According to similar releases from the GSEs, starting on November 13, 2015, Fannie Mae will lower its standard modification interest rate from 4 percent to 3.875 percent. Meanwhile, Freddie Mac will lower its standard modification interest rate by the same amount beginning on November 5, 2015. is will be the lowest the rate has ever been at 3.875 percent. "By adjusting the interest rate from time to time, you will have the ability to provide borrowers with a rate that aligns more closely to current market conditions," Freddie Mac said in its Standard Modification FAQs. Last month, the GSEs lowered the standard modification interest rate to 4 percent from 4.25 percent, where the rate had been from July 2015 to September 2015. Servicers must use the current Fannie Mae Standard Modification Interest Rate when evaluating a borrower for a conventional mortgage loan modification, excluding Fannie Mae HAMP Modifications. Servicers must use the Freddie Mac Standard Modification interest rate when determining the terms of a Standard Modification Trial Period Plan, Freddie Mac Streamlined Modification Trial Period Plan or a Capitalization and Extension Modification for Disaster Relief Trial Period Plan. Freddie Mac's Guidelines to Using the Interest Rate: » Visit their Web page on or after the fifth business day of every month for the new interest rate. » Implement the new interest rate on the tenth business day of the month, but no sooner. » Use the interest rate that is in effect and posted on Freddie Mac's website when evaluating a borrower until the mandatory effective date of the new interest rate. » Ensure the interest rate used to determine final modification terms is the same fixed rate that was used when determining eligibility for the Trial Period Plan and calculating the Trial Period payment – even if the interest rate that must be used for new Trial Period Plan evaluations subsequently changes. FORECLOSURE COMPLETIONS SKYROCKET, INVENTORY PLUMMETS Amid the continuing epic decline in foreclosure inventory, there was one notable hiccup in CoreLogic's September 2015 National Foreclosure Report released—foreclosure completions spiked by nearly 50 percent. e number of completed foreclosures surged from 37,000 in August up to 55,000 in September, an increase of 49.5 percent, largely due to an annual public auctioning of thousands of tax-foreclosed properties in Wayne County, Michigan, where Detroit is the county seat, according to CoreLogic. By comparison, foreclosure completions averaged about 21,000 per month in the pre-recession years from 2000 to 2006. e substantial monthly leap in foreclosure completions is just a one-time event, according to CoreLogic Chief Economist Frank Nothaft, and the number of completed foreclosures should return to its pre-September 2015 level in October; he noted that completed foreclosures were down by more than 17 percent year-over- year in September. "e spike in September is just due to the Wayne County tax auctions," Nothaft said. "It should not continue into October. You could also note that while there was an increase from August to September, completed foreclosures fell in September when compared with a year ago. e tax auctions will not affect the foreclosure inventories as I believe the tax foreclosures are not counted in the foreclosure inventory." Foreclosure completions paint a much more accurate picture of the foreclosure crisis because they reflect the total number of homes actually lost to foreclosure, as opposed to foreclosure starts or foreclosure inventory, since many of those homes avoid foreclosure through the loss mitigation process. While the 55,000 completed foreclosures in September is elevated compared to August and the immediately preceding months, it is still 17.6 percent lower than September 2014's total of completed foreclosures (67,000) and 52.8 percent lower than the monthly peak of 117,438 in September 2010. Since the crisis began in 2008, approximately 6 million homes have been lost to foreclosure; since homeownership rates peaked in 2004, approximately 8 million homes have been lost. Aside from the monthly spike in foreclosure completions, all other foreclosure-related metrics continued their steep declines and are at or below pre-recession levels. e number of seriously delinquent mortgages, which are those either 90 days or more overdue or in foreclosure or REO, dropped by 21.2 percent year-over-year in September down to 1.3 million properties (3.4 percent of all residential mortgages nationwide). It is the lowest rate for serious delinquent mortgages since December 2007. Foreclosure inventory, defined as mortgage loans in any state of foreclosure, tumbled by 24.3 percent year-over-year in September down to 1.2 percent, or 470,000 homes (compared with 1.6 percent, or 621,000, in September 2014). e foreclosure rate in September 2015 was also the lowest it has been since December 2007. September 2015 represented the 47th consecutive month that foreclosure inventory declined year-over-year. "e rate of delinquencies continues to drop back closer to historic norms powered by improved economic conditions and tighter post-recession underwriting standards," said Anand Nallathambi, president and CEO of CoreLogic. "As we head into 2016, based on almost every major metric, the fundamentals underpinning the housing market are healthier than any time since 2007." e sum of completed foreclosures for the 12-month period ending September 30, 2015, totaled 494,000, compared with 612,000 for the 12-month period ending September 30, 2014. ough Florida accounted for 91,000 of those completed foreclosures in the past year, there have been vast improvements in the Sunshine State. For the 12-month period ending September 2014, there were 120,000 completed foreclosures in Florida. e foreclosure inventory rate declined by 42 percent over the year in September 2015, from 4.4 percent down to 2.6 percent. REO sales made up just 6 percent of residential home sales in August 2015; at their peak in January 2011, REO sales made up 23.9 percent of all home sales, according to CoreLogic. KNOW THIS

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