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47 ยป VISIT US ONLINE @ DSNEWS.COM A CLOSER LOOK AT FORECLOSURE PREVENTION Fannie Mae and Freddie Mac took action to prevent more than 63,000 foreclosures in Q 3 2018, raising the total number of foreclosure prevention actions to more than 4.24 million since September of 2008, the Federal Housing Financial Authority reported. Additionally, there were 2,159 completed short sales and deeds- in-lieu during the quarter, bringing the total to 690,070 since the conservatorships began in September in 2008. e report added that there was an improvement in delinquency rates. One quarter of borrowers for whom loan modifications were conducted saw their monthly payments drop more than 20 percent, while the serious (90 days or more) delinquency rate dropped to .79 percent, better than the rates for Federal Housing Administration (FHA) loans (3.7 percent), Veterans Affairs (VA) loans (2 percent), and the industry average of 2.1 percent. e percentage of Fannie Mae and Freddie Mac loans that are 30-59 days delinquent increased to 1.5 percent while the 60-plus-day delinquency rate dropped to 1.1 percent at the end of the quarter. e Enterprises' serious delinquency rate also decreased to 0.79 percent at the end of the quarter. Nearly a fourth (24 percent) of the modifications in the quarter included principal forbearance, the report added. Modifications with extend-term only accounted for nearly 7-in-10 (68 percent) of all loan modifications during the period. FHFA pointed out that increases in house prices over the past couple of years have generally led to the rise in home equity even for delinquent homeowners, influencing the type of loan modification. Interest rate reductions are generally offered to borrowers with modest or no home equity, which has meant lower concessions on loan modifications, meaning a decreased payment change. However, FHFA stated that the reduction in the payment change has had the negative effect of slightly increasing the level of the post-modification delinquencies. Foreclosures declined during the period, the report indicated. Foreclosure starts fell 17 percent to 32,557, while third-party and foreclosure sales dropped 7 percent to 12,464. Also declining during the period was the real estate owned (REO) by Fannie Mae and Freddie Mac, which the report said dropped 4 percent in the third quarter to 27,262, as property dispositions continued to outpace REO acquisitions. LAWMAKERS AND INDUSTRY REACT TO CALABRIA NOM When the Trump administration announced the nomination of Dr. Mark Calabria to lead the Federal Housing Finance Agency (FHFA) many high-profile names were quick to support this decision. "e American $10 trillion mortgage market is the envy of the world, and to keep us on top we need an FHFA Director who is dedicated to capitalism and economic growth. Dr. Calabria is that man," said former House Financial Services Committee Chairman Jeb Hensarling (R-TX). "At a moment in time when the future of housing finance policy in our country will be permanently shaped by the next FHFA Director, I can think of no better or more responsible person for the role than Dr. Calabria and applaud President Trump for his outstanding pick." "I congratulate Mark Calabria on his nomination as director for the Federal Housing Finance Agency," said Ed Delgado, President and CEO of e Five Star Institute. "Housing finance policy is approaching a critical juncture and we look forward to working with Dr. Calabria and the team at FHFA towards implementing regulations that preserve and protect homeownership." If confirmed, Calabria would have significant influence over the housing finance market at the FHFA. According to Bloomberg, Calabria had previously pushed for putting Fannie and Freddie into receivership. "Calabria, a former scholar at the libertarian Cato Institute, has also called for abolishing the mortgage-interest deduction, something millions of homeowners benefit from. In addition, he has supported getting rid of government subsidies for the 30-year fixed rate mortgage," Bloomberg reported. In his commentary on the nomination, David Dworkin, President and CEO of the National Housing Conference wrote that having strong opinions in the private sector or in academia wasn't the same as "having your hand on the throttle that controls one-sixth of the U.S. economy." "Driving up mortgage interest rates in advance of a highly probable 2020 recession makes a strong case against hiking up guarantee fees at Fannie and Freddie. Eliminating the 30-year fixed rate mortgage would also force consumers into adjustable rate mortgages during a period of inevitably rising rates, potentially causing another major foreclosure crisis. No one wants that on their watch," Dworkin said. "One thing we do know for certain is that NHC and our members will work with whoever is confirmed to run FHFA, and we will continue to forcefully and respectfully advocate for the American Home, as we have done since 1931." Fannie Mae and Freddie Mac took action to prevent more than 63,000 foreclosures in Q3 2018.