Freddie Mac 2014 Annual Report Download - page 116

111 Freddie Mac
Table 50 — Single-Family Loan Workout, Serious Delinquency, and Foreclosure Volumes(1)
Years Ended December 31,
2014 2013 2012
Number of
Loans Loan Balances Number of Loans Loan Balances Number of Loans Loan Balances
(dollars in millions)
Home retention actions:
Loan modifications
with no change in terms(2) 320 $ 41 213 $ 25 533 $ 95
with term extension 15,781 2,311 6,645 700 3,894 313
with change in interest rate and, in certain cases, term
extension 34,191 6,579 46,739 7,314 38,871 6,246
with change in interest rate, term extension and principal
forbearance 16,860 3,864 29,591 9,368 26,283 8,483
Total loan modifications(3) 67,152 12,795 83,188 17,407 69,581 15,137
Repayment plans(4) 25,219 3,551 28,610 4,016 33,350 4,746
Forbearance agreements 8,553 1,587 12,019 2,331 13,026 2,557
Total home retention actions 100,924 17,933 123,817 23,754 115,957 22,440
Foreclosure alternatives:
Short sale 15,382 3,281 41,362 9,016 51,972 11,626
Deed in lieu of foreclosure transactions 3,634 575 2,720 437 1,036 179
Total foreclosure alternatives 19,016 3,856 44,082 9,453 53,008 11,805
Total single-family loan workouts(5) 119,940 $ 21,789 167,899 $ 33,207 168,965 $ 34,245
Single-family foreclosures(6) 52,168 81,605 105,060
Seriously delinquent loan additions 193,000 237,580 305,449
Seriously delinquent loans, at period end(7) 200,069 255,325 352,860
(1) Excludes those modification, repayment and forbearance activities for which the borrower has started the required process, but the actions have not
become effective, such as loans in modification trial periods. These categories are not mutually exclusive, and a loan in one category may also be
included in another category in the same period.
(2) Under this modification type, past due amounts are added to the principal balance and amortized based on the original contractual loan terms.
(3) Includes completed loan modifications under HAMP; however, the number of such completions differs from that reported by the MHA Program
administrator, in part, due to differences in the timing of recognizing the completions by us and the administrator.
(4) Represents the number of borrowers as reported by our seller/servicers that have completed the full term of a repayment plan for past due amounts.
Excludes borrowers that are actively repaying past due amounts under a repayment plan.
(5) Workouts relate to borrowers with financial hardship, regardless of the payment status (i.e., less than seriously delinquent).
(6) Includes third-party sales at foreclosure auction in which ownership of the property is transferred directly to a third party rather than to us.
(7) The number of seriously delinquent loans is also reduced when borrowers resume scheduled payments and the loans return to performing status.
The volume of foreclosures has moderated in recent periods and reflects a 36% decline in 2014 compared to 2013. The
volume of short sale transactions declined significantly in 2014 compared to 2013. Our short sale activity has declined for the
last seven consecutive quarters. Similarly, the volume of short sales in the overall market also declined in the last two years.
Based on information provided by the MHA Program administrator, our servicers had completed approximately 251,000
loan modifications under HAMP from the introduction of the initiative in 2009 through December 31, 2014. According to the
administrator, nearly 2,500 of our loans were in the HAMP trial period as of December 31, 2014. As of December 31, 2014, the
percentage of our HAMP modifications that were completed in 2012 and 2013 that were seriously delinquent, proceeded to
foreclosure transfer, completed a short sale, or were remodified was approximately 16% and 11%, respectively.
As of December 31, 2014, the borrower’s monthly payment for all of our completed HAMP modifications was reduced
on average by an estimated $500 at the time of modification, which amounts to an average of $6,000 per year, and a total of
$1.6 billion in annual reductions (these amounts are calculated by multiplying the number of completed modifications by the
average reduction in monthly payment, and have not been adjusted to reflect the actual performance of the loans following
modification).
The table below presents: (a) the percentage of modified single-family loans completed between the first quarter of 2012
and the fourth quarter of 2013 that were current or paid off one year after modification; and (b) the percentage of modified
single-family loans completed between the first quarter of 2012 and the fourth quarter of 2012 that were current or paid off two
years after modification.
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