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24 CONTINUED ECONOMIC GROWTH VITAL FOR STILL- CHALLENGED MARKETS Foreclosures and solutions have been on the steady decline for years, which means many housing markets are improving—and the key is sustaining that growth, according to a report released by HOPE NOW. In October 2015, the industry offered approximately 30,000 permanent loan modifications, compared with 39,000 the previous October (a 23 percent decline). Short sales dropped off by 37 percent in October year- over-year, from 10,400 to 6,600. Also declining substantially from October 2014 to October 2015 were deeds-in-lieu of foreclosure (2,300 down to 1,500, a 35 percent drop), foreclosure starts (65,000 down to 57,000, a 13 percent drop), foreclosure sales (39,000 down to 26,000, a 33 percent drop), and serious delinquencies (1.91 million down to 1.67 million, a 13 percent drop), according to HOPE NOW. "Our data has always been about finding significant trends so that our member and partners are best equipped to offer the right solution to the right borrower," HOPE NOW Executive Director Eric Selk said. "Sustainability is the key as the housing market continues to improve across the nation." e total number of non-foreclosure solutions in October 2015, including permanent loan modifications, short sales, deeds-in-lieu, and other workout plans, totaled 109,000, which still outpaced foreclosure sales during the month (26,000) by a ratio of approximately 4 to 1. "We are pleased to see that total solutions are still significantly outpacing foreclosure sales on a consistent basis," Selk said. "We are close to pre- crisis levels and that is good news. By reviewing the data from a year ago, we are also happy to see double digit decreases in foreclosure numbers and delinquency volume." To the end of achieving sustainability in housing markets, HOPE NOW—a voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors—has hosted a series of loss mitigation events in the areas hit hardest by the crisis to connect struggling borrowers face-to-face with mortgage servicers, housing counseling agencies, and local non-profit agencies and civic organizations. Year-to-date, 2,300 borrowers have received assistance at nine events; in the last event, which took place in New York City and included Fannie Mae, Freddie Mac, and the government's Making Home Affordable program, 375 borrowers received assistance. "As I have stressed each month, the focus of our industry members is largely on markets experiencing a slower recovery," Selk said. "Additionally, as loss mitigation efforts slow down—which is a good thing—HOPE NOW is looking at improving communities in this post-recession environment. We have taken a large role in neighborhood stabilization initiatives, abandoned property issues and holistic community revitalization. Our borrower outreach efforts have been complemented by high level roundtables with elected officials and community leaders." FHFA PROPOSES RULE FOR GSES TO OFFER MORTGAGES TO UNDERSERVED MARKETS Fannie Mae and Freddie Mac may soon be made to offer mortgages for homes in 'under- served markets.' A new rule, introduced in December, requires the Federal Housing Finance Agen- cy (FHFA) by federal law to issue a regulation to implement the Duty to Serve requirements specified in the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recov- ery Act (HERA) of 2008 among both GSEs. According to a press release from the FHFA, the proposed regulation will require the GSEs to serve three underserved markets including manufactured housing, affordable housing pres- ervation, and rural markets. "e proposed rule would require the Enter- prises to adopt plans to improve the distribution and availability of mortgage financing in a safe and sound manner for residential properties that serve very low-, low-, and moderate-income families in the three specified underserved mar- kets," the FHFA stated in the release. As part of the newly introduced rule, both GSEs will have Duty to Serve credit for all transactions that involve a secondary market for mortgages on residential properties in the specified underserved markets. In addition, the FHFA said that the rule would also create a method for gauging the GSEs' performance every year. FHFA's Duty to Serve credit for Underserved Markets: » For the manufactured housing market, Duty to Serve credit would be provided for eligible Enterprise activities related to manufactured homes financed as real property and blanket loans for certain categories of manufactured housing communities. » For the affordable housing preservation mar- ket, Duty to Serve credit would be provided for eligible Enterprise activities related to preserving the affordability of housing for renters and homebuyers, including ac- tivities under the programs specified in the Safety and Soundness Act. Duty to Serve credit would also be provided for activities related to existing small multifamily rental properties, energy efficiency improvements on existing multifamily rental and single- family first-lien properties, shared equity homeownership programs and the HUD's Choice Neighborhoods Initiative and Rental Assistance Demonstration program. » For the rural market, Duty to Serve credit would be provided for eligible Enterprise activities related to housing in rural areas, including activities serving the following high-needs rural regions and populations: Middle Appalachia, the Lower Missis- sippi Delta, colonias, members of a Native American tribe located in a Native American area, and migrant and seasonal agricultural workers. The consecutive number of months of decline for nationwide foreclosure inventory as of October 2015. As of the end of October, 1.2 percent of all homes with a mortgage (about 463,000), the lowest level since November 2007. Source: CoreLogic STAT INSIGHT 48

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