Homeowner Assistance
At this critical time, homeowner assistance is a critical part of Freddie Mac’s mission. We believe it's the right thing to do for families and communities, and as a responsible steward of taxpayer support. Since the housing crisis began, we have helped more than 830,000 struggling borrowers avoid foreclosure and 1 million refinance through the Home Affordable Refinance Program (HARP).
We're helping homeowners by:
- Participating in hundreds of foreclosure prevention workshops nationwide.
- Expanding our options to help homeowners avoid foreclosure.
- Enhancing and simplifying our loss mitigation programs – including streamlining processes and reducing documentation requirements.
- Responding to unique needs and situations, such as special mortgage relief options for service members and temporary relief for homeowners impacted by natural disasters.
- Enabling our servicers’ success in helping borrowers through the Servicing Success Program, which includes a balanced servicer scorecard with a significant focus and weighting on early intervention and finding solutions for struggling homeowners.
- Enhancing technology to improve ease of doing business for our servicers.
In addition to helping borrowers through our loss mitigation programs, we have worked closely with national nonprofits for years to educate borrowers about foreclosure prevention and mortgage fraud. This includes providing free counseling to borrowers through our borrower help centers located in cities especially hard hit by the foreclosure crisis, including Chicago, Phoenix, Washington, D.C. and Miami. We support these efforts through a number of online resources including CreditSmart®, our award-winning financial literacy curriculum.
Freddie Mac has long been recognized as an industry leader in identifying and addressing delinquencies before they become foreclosures. This is one of the reasons that our share of the nation’s seriously delinquent loans is among the lowest in the industry. Another reason is that we’ve primarily operated in the conventional, conforming mortgage market, buying 30- and 15-year fixed-rate mortgages. So while delinquencies are up across the board, they are nearly five times higher for subprime mortgages.
Mortgage Landscape
Industry-wide, there were 3.4 million seriously delinquent mortgages in the U.S. at the end of December 2012. Freddie Mac holds only 10 percent of these delinquent mortgages. So while we own approximately a quarter of all outstanding first-lien home loans, we hold a disproportionately small percentage of seriously delinquent mortgages.
Sources: FDIC, Freddie Mac, Fannie Mae, HUD, VA, Mortgage Bankers Association, CoreLogic, Federal Reserve. Note: Data as of December 31, 2012. Seriously Delinquent loans were at least 90 days delinquent or in foreclosure. Components may not sum to 100% because of rounding. Freddie Mac and Fannie Mae figures include whole loans held in portfolio and in guaranteed securities outstanding.
Community Stabilization Efforts
In cases where foreclosure is unavoidable, we have designed our REO programs and policies to maintain home values and help stabilize communities:
- Owner-occupant Sales Strategies. Most of our marketing and sales strategies are focused on attracting owner-occupants - buyers who intend to live in the homes as opposed to renting them out - and include incentives for both the real estate agents and prospective homebuyers. Approximately two-thirds of our homes are sold to owner-occupants.
- Good Neighbor Policies. Our “Good Neighbor” property preservation and maintenance best practices are designed to ensure that buyers purchase Freddie Mac homes in move-in condition, and that property values are maintained for neighborhoods.
- Property Valuation. Because our homes are priced right for the local market and are well maintained, most of our homes sell close to full estimated market value – an average of 95% for 2012.