The Federal Housing Finance Agency (FHFA) reported in their first quarter 2011 report that the government-controlled GSEs have made fewer loan modifications again for the third consecutive quarter. However, those modifications have “resulted in deeper payment reductions for more people,” said FHFA[1]. The number of completed GSE modifications fell by more than 30,000 during the first quarter of 2011, but the success of those modifications is on the rise. Additionally, 2010 loan modifications are performing “substantially better” than those modified prior to 2010.

In an effort to continue the positive progress, Fannie Mae also unveiled new rules for home loan servicers when it comes to avoiding foreclosure. Loan servicers now must contact homeowners both verbally and in writing within 120 days of the start of delinquency and make a legitimate attempt to complete a loan modification to keep the borrower in their home[2]. In addition to preventing foreclosures, the GSEs also hope to avoid additional negative publicity over poor servicing practices.

Do you think that this news about modifications is good news?

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[1] http://nationalmortgageprofessional.com/news25455/fhfa-report-finds-loan-mods-drop-third-consecutive-quarter?

[2] http://www.bizjournals.com/orlando/morning_call/2011/06/fannie-mae-updates-delinquent-mortgage.html