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22 MAJORITY OF TROUBLED LOANS SOLD BY FHFA ARE UNRESOLVED e Federal Housing Finance Agency (FHFA) began its non-performing loan (NPL) sales through Freddie Mac in 2014 and Fannie Mae joined in the following year with its first NPL sale. e stated goal of these NPL sales was to help borrowers avoid foreclosure and at the same time reduce the number of deeply delinquent mortgage loans from the mortgage investment portfolios of Fannie Mae and Freddie Mac. e preliminary outcomes for borrowers on 8,849 NPLs sold before June 30, 2015 (reflecting outcomes through December 31, 2015) indicate that about three-quarters of these loans remain delinquent, according to FHFA's first-ever Non- Performing Loan Sales Report. Out of that 75 percent, 1.9 percent were in a trial modification. According to the FHFA's report, only 24 percent of borrowers on the 8,800-plus loans had been resolved—with 12 percent avoiding foreclosure and 12 percent going through to foreclosure. Out of the 12 percent that avoided foreclosure, 3.7 percent self-cured, 3.1 percent received a permanent modification, 2.7 percent sold off in a short sale, 1.2 percent of the mortgages were paid in full, and 1.1 percent executed a deed-in-lieu of foreclosure. "is report reflects the first available results since the Enterprises started to sell NPLs and since we put in place enhanced requirements for servicing these loans," FHFA Director Melvin L. Watt said. "e report demonstrates our commitment to transparency as we work to achieve more favorable outcomes for borrowers and for the Enterprises by providing alternatives to foreclosure whenever possible. Because the program is new, we have only preliminary data about outcomes to share, but we will continue to provide regular reports as we gain new outcome information." e report includes NPL sales data through the end of May 2016. As of the end of May, FHFA has sold more than 41,600 NPLs with a total unpaid principal balance of $8.5 billion. e NPLs sold were an average of nearly three- and-a-half years delinquent and had an average current LTV ratio of 98 percent. More than half of the NPLs sold were located in three states: New Jersey, New York, and Florida. FHFA announced enhanced requirements in both March 2015 and April 2016 to encourage purchasers of NPLs to prioritize outcomes for borrowers other than foreclosure. DS News is the only publication in the country solely dedicated to providing default servicing professionals with news and content focused on their industry. SUBSCRIBE NOW! Call 214.525.6766 or subscribe online at DSNews.com. SUBSCRIBE TO THE LEADER IN DEFAULT SERVICING NEWS CASTRO UP CLOSE Golden Boy. Wunderkind. VP? The HUD Secretary in his own words. default servicing in print and online @ dsnews.com 03.2016 COVER FEATURE THE UNEVEN COMPLIANCE BURDEN ON SMALLER SHOPS HOW SHOULD YOUR BUSINESS ADJUST? THE NEXT BIG THING TEN-X TAKES IT UP A NOTCH. The number of states who have an inventory of foreclosed homes lower than the national rate. Source: CoreLogic STAT INSIGHT 29

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