Loan Modifications Decrease Payments over 20 Percent

loan modification saves couple

In its third quarter, Fannie Mae and Freddie Mac implemented 405,700 trial and permanent loan modifications under the administration’s Home Affordable Modification Program (HAMP) and refinanced 4 million loans, according to Foreclosure Prevention & Refinance Report, the Federal Housing Finance Agency (FHFA).

Nearly half of the modifications resulted in borrowers’ payment decreasing by over 20 percent. In addition, loans modified in recent quarters performed slightly better six months after modification than did earlier modification. Short sales and deeds in lieu increased by 39 percent to 17,400.

In addition to refinancing 4 million loans, Fannie Mae and Freddie Mac refinanced more than 155,700 loans through the Home Affordable Refinance Program (HARP), from January through November 2009. HARP grew to 9 percent of total refinancing volume in August and September, and in November it increased to 9.8 percent.

Volumes of all categories of foreclosure prevention actions increased during the third quarter. According to the report, approximately 105,500 foreclosure prevention actions were completed in the third quarter (up 22% from the second quarter).

Source: Brittany Dunn (

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