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41 » VISIT US ONLINE @ DSNEWS.COM WHY PREPAYMENT ACTIVITIES HAVE DECLINED Prepayment speeds declined to a decade- low in November driven by shrinking refinance activity and a seasonal slow down in home sales, according to Black Knight's First Look report that gave insights into the market's mortgage performance. e report revealed that prepays, which are now primarily driven by home sales fell 14 percent on a month-over-month basis and by 29 percent from the same period a year ago. According to Black Knight, prepayments had reached these levels during the financial crisis when interest rates were well above 6 percent and purchase lending had fallen by 50 percent over 24 months. e report, which also focuses on delinquency data, found a slight increase in national delinquency rates. Serious delinquency rates also saw a slight uptick, even though they remained "significantly below the rates seen during the same period last year." Foreclosure starts fell 11 percent from October with around 45,200 starts recorded in November. "A slight uptick in foreclosure inventory was offset by a month-over-month increase in the number of outstanding mortgages, resulting in a net decline in the national foreclosure rate," the report said. Giving insights into properties that were past due but not in foreclosure, the report revealed that in November, homes that were 30 or more days past due increase by 41,000 to approximately 1.9 million. However, they remained well below the properties past-due last year. e number of properties that were 90 or more days past due were 156,000 below the same period last year but saw an uptick by 11,000 on a month-over-month basis. e presale inventory for properties in foreclosure also rose slightly over October but remained 69,000 below the same period in 2017. Breaking down states on the basis of non- current totals, which combine foreclosures and delinquencies as a percent of active loans in that state, the report found that Mississippi was among the top five states by non-current percentage in November, followed by Louisiana, Alabama, Arkansas, and Virginia. e five states with the least non-current percentage included Idaho, California, Washington, Oregon, and Colorado. THE GSEs SET YEARLY FOCUS e Federal Housing Finance Agency (FHFA) released the 2019 Scorecard for Fannie Mae, Freddie Mac, and Common Securitization Solutions recently. e FHFA notes that the 2019 Scorecard furthers the goals outlined in the Agency's 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac. Much like the previous year's Scorecard, the GSEs, as well as Common Securitization Solutions, will be assessed for all Scorecard items based on the following key criteria: » e extent to which each Enterprise conducts initiatives in a safe and sound manner consistent with FHFA's expectations for all activities; » the extent to which the outcomes of each Enterprise's activities support a competitive and resilient secondary mortgage market to support homeowners and renters; » the extent to which each GSE meets FHFA's expectations under the Conservatorship Capital Framework (CCF), including FHFA's expectations on meeting appropriate return on conservatorship capital targets; » the extent to which each Enterprise conducts initiatives with consideration for diversity and inclusion consistent with FHFA's expectations for all activities; cooperation and collaboration with FHFA, each other, the industry; » and other stakeholders; and the quality, thoroughness, creativity, effectiveness, and timeliness of their work products. Goals for 2019 include reducing taxpayer risk through increasing the role of private capital in the mortgage market; and building a new single-family infrastructure for use by the GSEs and adaptable for use by other participants in the secondary market in the future. Another key goal FHFA expects for 2019 is for the GSEs to maintain, in a safe and sound manner, credit availability and foreclosure prevention activities for new and refinanced mortgages to foster liquid, efficient, competitive, and resilient national housing finance markets. In the Scorecard, FHFA notes that it expects Fannie Mae and Freddie Mac to operate their single-family and multifamily business activities safely and effectively, in a manner that supports safety and soundness, market liquidity, and access to credit. of the conventional loans that were seriously delinquent in 2018 were originated between 2003 and 2009. Source: CoreLogic Report, released in January 2019 STAT INSIGHT 67%

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