Industry NewsMortgage

Fannie, Freddie foreclosure starts spike

Prevention efforts grow at slower pace

A new report shows foreclosure starts among the 30.4 million first-lien residential mortgages owned or guaranteed by Fannie Mae and Freddie Mac -- most of them prime loans -- jumped 63 percent during the first three months of the year, to 243,800.The sharp increase in the number of homes entering the foreclosure process compared to the previous quarter outpaced the 20 percent increase in foreclosure prevention actions by Fannie and Freddie's 3,000 loan servicers. Those actions, including loan modifications, forbearance and repayment plans, and short sales, totaled 87,000.Fannie Mae and Freddie Mac own or guarantee 56 percent of outstanding mortgages, and about 84 percent of them are considered prime loans. The 151,600 foreclosure starts on prime borrowers in the first quarter of 2009 represented a 260 percent increase from a year ago, while foreclosure starts on nonprime borrowers nearly doubled, to 92,200.Completed foreclosure sales and third-party sales were also up 17 percent from t...