Freddie Mac 2014 Annual Report Download - page 117

112 Freddie Mac
Table 51 — Quarterly Percentages of Modified Single-Family Loans — Current or Paid Off(1)
Quarter of Loan Modification Completion(2)
4Q 2013 3Q 2013 2Q 2013 1Q 2013 4Q 2012 3Q 2012 2Q 2012 1Q 2012
One Year Post-Modification
HAMP modifications 81% 80% 80% 82% 80% 80% 81% 81%
Non-HAMP modifications 70 73 74 76 72 72 74 62
Total 72 75 76 78 75 76 78 76
Two Years Post-Modification
HAMP modifications N/A N/A N/A N/A 77% 76% 78% 77%
Non-HAMP modifications N/A N/A N/A N/A 68 67 69 57
Total N/A N/A N/A N/A 71 71 75 73
(1) Represents the percentage of loans that were current and performing or had been paid in full. For loans modified in a quarterly period, the
reperformance rates for one year and two years post-modification represent the percentage of loans that were current or paid off after 12 to 14 months
and 24 to 26 months, respectively.
(2) For loans that have been remodified (e.g., where a borrower has received a new modification after defaulting on the prior modification) the rates reflect
the status of each modification separately. For example, in the case of a remodified loan where the borrower is performing, the previous modification
would be presented as being in default in the applicable period.
Loans that remain delinquent for more than a year are more challenging to resolve as many of these borrowers: (a) may
not be in contact with the servicer; (b) may not be eligible for modifications; (c) are in geographic areas where the foreclosure
process has lengthened or is subject to judicial review; or (d) may determine that it is not economically beneficial for them to
enter into a modification due to the amount of costs incurred on their behalf while the loan was delinquent. The longer a loan
remains delinquent, the greater the associated costs we incur, in part due to expenses associated with loss mitigation and
foreclosure. Foreclosures generally take longer to complete in states where a judicial foreclosure is required, compared to other
states.
The table below presents the average completion times in certain states for foreclosures completed during 2014, 2013,
and 2012.
Table 52 — Foreclosure Timelines for Single-Family Loans(1)
Year Ended December 31,
2014 2013 2012
(average days)
Judicial states:
Florida 1,312 1,231 1,026
New Jersey 1,373 1,224 873
New York 1,299 1,123 720
All other judicial states 779 770 686
Judicial states, in aggregate 1,018 943 773
Non-judicial states, in aggregate 663 567 475
Total 870 773 611
(1) All averages exclude those loans underlying our Other Guarantee Transactions.
During 2014, a significant number of loans that had been subject to delays (and that had been delinquent for more than a
year) completed the foreclosure process, which caused the nationwide average time for foreclosure completions to increase
compared to 2013. The UPB of loans that have been delinquent for over one year declined from $25.0 billion at December 31,
2013 to $18.2 billion as of December 31, 2014. The number of loans in the process of foreclosure declined approximately 32%
in 2014 to the lowest level in several years, with most states experiencing a decline. The number of loans in the process of
foreclosure in Florida declined 48% during 2014, and as of December 31, 2014 comprised approximately 17% of such loans.
As of December 31, 2014, loans in New York, New Jersey, Massachusetts and the District of Columbia collectively comprised
approximately 28% of the total number of our single-family loans in the process of foreclosure.
Our servicing guide states that for loans beginning the foreclosure process since November 2014, the expected timeline to
complete foreclosure, excluding allowable delays, ranges from 300 days in three states and the District of Columbia to 840
days in Hawaii.
Managing REO Activities
Our problem loan workouts are providing borrowers with viable alternatives to foreclosure. As a result of the continued
high level of loss mitigation efforts, fewer of our loans are proceeding through foreclosure to REO acquisition.
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