Early this month the Federal Housing Finance Agency, FHFA, issued its quarterly “Foreclosure Prevention Report.” The highlight of the report was the dramatic drop in borrower delinquencies, 11 percent from the end of last year to the end of 2013’s first quarter.1 The level of delinquencies reached the lowest level since the height of the sub-prime lending crisis. After reading the report, I could not help to be impressed at the tremendous mobilization of agencies and commercial banks to overcome what could have been disastrous.
According to the report, there were 130,100 completed actions in an effort to prevent foreclosure. Of these, about 63,600 were permanent loan modifications, and 30,300 short sales and deeds-in-lieu. Of the modifications, 14,800 of were accomplished through HAMP and the other 77 percent through commercial proprietary modification programs. Of course, these numbers alone don’t tell the whole story. To be impressed, we need to account for the total number of cases that effectively helped homeowners save their homes, 2.3 million since 2008.2
We are a tough crowd to please, but I think if we look at other financial crises, and if we compare the developments in our country to how other countries have handled situations like this, we can appreciate the concerted efforts of government agencies, banks and homeowners to prevent what could have been a devastating fall for us all.
So what do I praise so much? two things, the variety of lifesaver alternatives that, one way or another, came to be, and the resolve to help those who were at risk of losing it all. In conjunction, government agencies and banks stepped up and came up with rate reductions, loan modifications, extensions of terms, and principal forbearance as a way to assuage the crisis. By the same token, many homeowners have grabbed onto whatever solutions were concocted; and contrary to what was originally projected, there have been far fewer foreclosures.
I can easily imagine some people saying that all of this came late; however, given where we are, this is an easy and thoughtless complain to make. What would the complaint be if we had not mobilized the way we have? So today, with a tremendous love for our country, I praise all of those who have taken action to overcome our shortcomings.
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