WASHINGTON, D.C. (October 17, 2022) – The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 3 basis points from 0.72% of servicers’ portfolio volume in the prior month to 0.69% as of September 30, 2022. According to MBA’s estimate, 345,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.30%. Ginnie Mae loans in forbearance increased 1 basis point to 1.33%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 12 basis points to 1.14%.

“The overall number of loans in forbearance dropped in September, but the pace of forbearance exits slowed to a new survey low and new forbearance requests continued to come in. This dynamic in turn prevented any substantial improvement in the forbearance rate,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The COVID-19 federal health emergency is still in effect and in most cases, borrowers can still seek initial COVID-19 hardship forbearance.”

Added Walsh, “In the near-term, the number of loans in forbearance will likely increase for another reason – the recent devastation caused by Hurricane Ian in Florida, South Carolina, and other states. MBA’s Loan Monitoring Survey requests that servicers report all loans in forbearance regardless of the borrower’s stated reason – whether pandemic-related, due to a natural disaster, or another cause.” 

Industry-First Capability Will Also Help Lenders Qualify More First-Time and Underserved Borrowers

McLean, Va., Oct. 17, 2022 — Freddie Mac (OTCQB: FMCC) will increase homeownership opportunities by including a review of a borrower’s bank account data to identify a history of positive monthly cash flow activity as part of its technology’s loan purchase eligibility assessments, the company announced today. This industry-first innovation will be available to mortgage lenders nationwide through Freddie Mac’s automated underwriting system, Loan Product Advisor^® (LPA^SM), beginning November 6, 2022.

“With the addition of positive monthly cash flow data, our underwriting system can help with more accurately predicting a borrower’s ability to pay their mortgage because it uses a comprehensive view of how personal finances are managed over time,” said Terri Merlino, Freddie Mac Single-Family senior vice president and chief credit officer. “Our latest innovation levels the playing field and helps make homes more accessible to borrowers whose lenders might not have qualified them with traditional methods of underwriting. This should particularly help first-time homebuyers and underserved communities.”

With the borrower’s permission, lenders and brokers can submit financial account data for LPA to identify 12 or more months of cash flow activity for inclusion in the tool’s risk assessment. Data can be obtained from checking, savings and investment accounts, including those used for direct deposit of income and monthly bill payments, such as rent, utilities and auto loans. The account data submitted can only positively affect the borrower’s credit risk assessment. To help identify opportunities, LPA will notify lenders when submitting additional account data could benefit a borrower.

Lenders and brokers can obtain the financial account data from designated third-party service providers using the same automated process they currently use to verify assets, income (using direct deposit), employment, and on-time rent payments via a single report through LPA’s asset and income modeler (AIM).

Working alongside our industry partners, we have made significant progress toward modernizing the mortgage origination process,” said Kevin Kauffman, Freddie Mac Single-Family vice president of client engagement. “In the current market, our latest industry-leading innovation delivers lender efficiencies that can lead to cost savings and improvements to the borrower experience, while meeting Freddie Mac’s strong credit underwriting standards.”

Initial service providers supporting Freddie Mac’s LPA borrower cash flow assessment include Blend, Finicity (a MasterCard company), FormFree and PointServ. Freddie Mac’s privacy policy is available online.

To learn more, visit the AIM webpage

FNM-HPI Measured Annual Home Price Growth of 13.8 Percent in Q3 2022

WASHINGTON, DC – October 17, 2022 – Single-family home prices increased at a non-seasonally adjusted annual rate of 13.8 percent in Q3 2022, down from the previous quarter’s revised 19.1 percent, according to Fannie Mae’s (FNMA/OTCQB) latest Home Price Index (FNM-HPI) reading, a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States, excluding condos. On a quarterly basis, home prices rose a seasonally adjusted 0.2 percent in Q3 2022, the slowest quarter of growth since Q4 2011. On a non-seasonally adjusted basis, home prices declined by 0.2 percent in Q3 2022.

“Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates – and declining housing affordability – appears to have weighed further on demand,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “In addition to the greater affordability constraints for potential homebuyers, many existing homeowners likely feel ‘locked-in’ to their existing, lower interest-rate mortgages. This contributes to fewer homes being listed, as well as fewer potential buyers, and may lead to a growing share of listings having to cut prices to meet the reduced demand. Furthermore, the supply of completed, new single-family homes for sale has begun to rise, suggesting that homebuilders may also need to begin offering greater price concessions to move inventory. We expect these trends to continue in the coming months.”

The FNM-HPI is produced by aggregating county-level data to create both seasonally adjusted and non-seasonally adjusted national indices that are representative of the whole country and designed to serve as indicators of general single-family home price trends. The FNM-HPI is publicly available at the national level as a quarterly series with a start date of Q1 1975 and extending to the most recent quarter, Q3 2022. Fannie Mae publishes the FNM-HPI approximately mid-month during the first month of each new quarter.

For more information on the FNM-HPI, including a description of the methodology and the Q3 2022 data file, please visit our Research & Insights page on fanniemae.com.

To receive e-mail updates regarding future FNM-HPI updates and other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.

Fannie Mae’s home price estimates are based on preliminary data available as of the date of index estimation and are subject to change as additional data become available. Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.