This annual report describes FHFA's accomplishments, as well as challenges, the agency faced in meeting the strategic goals and objectives during the past fiscal year.
Read about the agency’s 2020 examinations of Fannie Mac, Freddie Mac and the Home Loan Bank System.
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As conservator, FHFA is focused on ensuring that each Enterprise builds capital and improves its safety and soundness.
Operate the business in a safe and sound manner.
Promote sustainable and equitable access to affordable housing.
FHFA experts provide reliable data, including all states, about activity in the U.S. mortgage market through its House Price Index, Refinance Report, Foreclosure Prevention Report, and Performance Report.
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FHFA is closely monitoring the coronavirus national emergency's effect on the housing finance market and continues to update policies and guidance to ensure its regulated entities – Fannie Mae, Freddie Mac (the Enterprises), and the Federal Home Loan Banks (FHLBanks) – are fulfilling their mission of providing market liquidity during this difficult time.
Learn about options available for homeowners affected by the coronavirus.
Federally regulated Fannie Mae and Freddie Mac have come together to get the word out about mortgage relief options for those affected by natural disasters. Our goal is to make sure you have time to focus on your safety.
Learn about options available for homeowners affected by natural disasters.
FHFA, jointly with the Enterprises, announced the Servicing Alignment Initiative (SAI) in April 2011 with an effective date of October 1, 2011. The objective of SAI was to develop consistent servicing policies that would help servicers to do a better job of resolving delinquencies in a consistent, efficient, and expeditious manner with the goal of keeping struggling borrowers in their homes whenever possible while minimizing losses to the Enterprises and taxpayers. Under SAI, the Enterprises developed a broad suite of aligned loss mitigation programs that streamline the delivery of loss mitigation solutions to borrowers. The success of these efforts is tracked in FHFA's quarterly
Foreclosure Prevention Report which documents the Enterprises’ performance in foreclosure prevention actions for borrowers. The loss mitigation solutions outlined in the reports are currently being re-evaluated and redesigned to address a more stable economic environment.
On July 25, 2016 FHFA, the U.S. Department of the Treasury, and the U.S. Department of Housing and Urban Development (HUD) issued a joint white paper entitled,
Guiding Principles for the Future of Loss Mitigation: How the Lessons Learned from the Financial Crisis can Influence the Path Forward. The white paper details five key principles for the future of loss mitigation. The key principles set forth in the white paper are:
In 2016, the Enterprises developed the Flex Modification, which is described below, with these key principles in mind. In 2017, FHFA required the Enterprises to evaluate possible changes to the existing loss mitigation options for borrowers that include repayment plans, forbearance plans, short sales, and deeds-in-lieu of foreclosure, to reflect the key principles developed for the future of loss mitigation.
The suite of programs detailed below encompasses the core loss mitigation programs currently offered by the Enterprises. This is not meant to be a comprehensive list of every program an Enterprise may offer. The loss mitigation programs listed are solely for Enterprise loans, and different loan options are available for government insured loans (e.g., FHA-insured loans) or for loans that are not owned or guaranteed by the Enterprises. Not all borrowers will be eligible for a particular program, and other terms or conditions may apply.
In a repayment plan, past due amounts are added on to the borrower’s mortgage payment to be repaid over several months in order to bring the mortgage current. Repayment plans allow a borrower time to catch up on late payments without having to come up with a lump sum.
Forbearance plans allow a borrower to make reduced mortgage payments or no mortgage payments for a specific period of time. The borrower gains time to improve their financial situation and possibly qualify for a better option than would be available at that time. Forbearance may be granted for borrowers in temporary or short-term financial difficulty. At the conclusion of the forbearance period the borrower is required to pay any missed payments or amounts, which is generally achieved with a repayment plan or modification.
A payment deferral allows a borrower to keep the same monthly payment by moving past-due amounts to the end of the loan as a non-interest bearing balance, due and payable at maturity, sale, refinance, or payoff. Missed tax and insurance payments (escrow payments), may affect the total monthly payment.
In 2016, FHFA required the Enterprises to develop an aligned post-crisis loan modification program that built on lessons learned from the crisis-era modification programs. The aligned effort resulted in the Flex Modification, announced in
December 2016. Flex Modification replaced Standard and Streamlined Modifications. Servicers were required to implement Flex Modification by October 1, 2017.
Flex Modification terms are:
Capitalize arrearages (such as missed payments)
Reduction of interest rate to the lesser of the current modification rate of the borrower's rate, for borrowers with mark-to-market loan-to-value (MTMLTV) above or equal to 80%
Term extension to 40 years from the modification date
Forbear principal if needed to reduce the MTMLTV to 100%, with a maximum forbearance of 30% of the post modification UPB
For borrowers who are less than 90 days past due, if the borrower has not achieved a 20% payment reduction and 40% Housing expense-to-Income Ratio (HTI), forbear additional principal until those targets are met, down to 80% MTMLTV, with a maximum of 30% of the post modification UPB
For borrowers who are 90 days or more past due, Flex Mod provides additional forbearance for borrowers with MTMLTVs above 80% if needed to target a 20% payment reduction
Flex Modification requires servicers to offer a modification to eligible borrowers who are at least 90 days delinquent, without requiring a borrower to submit any documentation.
Short Sale is a foreclosure alternative where a borrower sells the home for less than the balance remaining on the mortgage. The borrower sells the home and pays off a portion of the mortgage balance with the proceeds. The borrower may be required to pay off the remaining mortgage balance. A short sale allows a borrower to transition out of the home without going through foreclosure. In some cases, relocation assistance may be available.
Deed-in-Lieu is a foreclosure alternative where a borrower voluntarily transfers the ownership of the property to the owner of the mortgage in exchange for a release from the mortgage loan and payments. The borrower may be required to pay off the remaining mortgage balance if the value of the property is lower than the amount owed. A deed-in-lieu allows the borrower to transition out of the home without going through foreclosure. In some cases, borrowers may be eligible for relocation assistance.
Page last updated: August 25, 2022
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