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By the Numbers: Short Sale, REO, and HAMP transactions in 2012

Short Sales, Loan Mods & Foreclosure Stats lend insight for 2012 & 2013
 
Year of the Short Sale
 
Many experts are calling 2012 the “year of the short sale,” mostly due to the fact that the number of short sales increased tremendously from previous years at a time when the market was gaining traction. Growth is still continuing and is expected to continue throughout 2013, but it’s going to be hard to beat 2012’s figures.
 
short sale The Federal Housing Finance Agency (FHFA) recently released a report indicating that mortgage giants Fannie Mae and Freddie Mac completed a record number of short sales in the third quarter of 2012. Numbers are expected to be even higher for the fourth quarter, when lenders were rushing to complete short sales before the potential tax relief expiration at the end of the year.
 
The increase was due to new procedures and guidelines Fannie and Freddie implemented in June, which caused an acceleration of the review and approval procedures of short sales. All in all, 37,966 short sales and deeds-in-lieu were filed during the third quarter. This was up 4 percent from the second quarter and up a whopping 23 percent from the year prior.
 
Real Estate Owned (Lender Owned Inventory)
 
In correlation with the increase of short sales was the decrease of the lenders’ inventories of real estate owned (REO) homes, meaning they sold more homes (218,321 sold in total) than they attained via foreclosures (197,507 homes were acquired through foreclosure).
 
This last quarter attributed majorly toward the decrease of REO homes, with only 158,138 in their inventory as of fourth quarter 2012. This was down 13 percent from same-time 2011 and down a staggering 36 percent from 2010, which saw a record high 241,684 REO homes in their inventory.
 
fannie mae short sale freddie mac short sale
Freddie Mac & Fannie Mae
 
Since the government seized control of Fannie Mae and Freddie Mac in the midst of the 2008 lending crisis, loan servicers have been assisting them in signing off loans. Over the last four years servicers have approved 1.26 million loan modifications and 2.1 million home retention actions. Meanwhile, more than 1.1 million foreclosed homes have been acquired and 413,436 short sales have been completed by Fannie Mae and Freddie Mac.
 
In total, nearly 4 million foreclosures have occurred since September 2008.
 
Loan Modifications
 
A total of 62,561 loan modifications were completed in third quarter 2012. Of those, over a third accounted for principal forbearance, while monthly payment amounts declined by 30 percent for roughly 45 percent of borrowers.
 
Another interesting thing to look at is the data surrounding the Home Affordable Modification Program (HAMP) which was put into effect by the Obama administration in April 2009. Of the approximately 1 million borrowers who were granted access to a trial loan modification, 21.2 percent have defaulted as of October 2012. The 428,946 borrowers remaining in the program are currently in active permanent modifications.
 
Fannie Mae and Freddie Mac account for 564,822 of the non-HAMP permanent loan modifications made. Two thirds of all modifications are non-HAMP.
 
Delinquency Rates
 
Meanwhile, the number of delinquent loans increased to 2.08 percent of all loans handed out in the third quarter, while the number of seriously delinquent loans decreased to 3.39 percent. This can be seen as both good as bad – good the seriously delinquent loans (or those to which payments have not been made in over 90 days) are falling, but bad the rising number of delinquent loans (or those to which payments have not been made in 30-60 days) could turn into seriously delinquent loans in the near future, thus raising that number once again.
 
And a couple interesting tidbits: more than half of the seriously delinquent borrowers have gone an entire year without paying a single payment, and 3/10 of those borrowers live in Florida.
 
Arizona delinquency rates range from 2 to 4 percent, with 17 percent of delinquent borrowers being late by over a year. To see more information about Arizona short sales, foreclosures, and other facts pertaining to the housing market, visit http://www.fhfa.gov/Default.aspx?Page=393.
 
Tracy (G+) is an Arizona Short Sale Realtor, Investor, Rehabber, and Foreclosure Expert.
 
She also is an avid blogger, vlogger, contributor to the Bigger Pockets Blog, and consultant on all things Arizona Foreclosures.


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Happy customers are saying:

“Hey Tracy, just a quick note to say thanks from me and the wife about the short sale. I have to admit I was a little worried about wrecking our credit. We really appreciate you taking care of all this and letting us know with texts and emails and phone calls what was going on, and how surprised I was we got it sold with only ONE late payment on my credit and without owing a dime..."...