Loan modification numbers at government-sponsored enterprises Fannie Mae and Freddie Mac expanded notably in the first quarter, confirming other recent studies that suggest the use of this workout option is trending upward.
The number of loans completing this type of workout more than doubled during the period, rising to 41,375 from 16,913 the previous quarter in line with expectations that borrowers with later exits from pandemic-related forbearance would be more likely to have lingering hardships.
That brings the number of completed mods, which are designed to lower payments for borrowers with long-term reductions in income, closer to rivaling deferrals, which are used by homeowners who can afford to resume regular payments. Deferrals set aside forborne amounts for later payment. Completed deferrals dropped to 58,134 in the first quarter from 102,700 during the previous three-month period, according to the Federal Housing Finance Agency’s latest report.