According to HousingWire's reporting on the Federal Housing Finance Agency's latest data, Fannie Mae and Freddie Mac saw their foreclosure prevention work slow down in May compared to the previous month. The two government-sponsored enterprises completed fewer prevention actions overall, with permanent loan modifications making up the bulk of what they did accomplish. These modifications took different forms, with most involving principal forbearance rather than simply extending loan terms.
The report shows that while the total number of people helped declined, the total number of loans sitting in forbearance actually ticked up slightly from April to May. The vast majority of these loans were current or only slightly behind on payments, though a small portion had been in forbearance for longer than a year. At the same time, delinquencies rose across the board, with more borrowers falling thirty to sixty days behind and even more falling sixty or more days behind on their mortgages.
On the refinancing side, activity dropped significantly in May, driven largely by rising mortgage rates that made refinancing less attractive for borrowers. HousingWire noted that cash-out refinances made up a bigger piece of the smaller pie, meaning more people were tapping home equity when they did refinance, even though overall refinance volume fell sharply. The portion of borrowers choosing shorter fifteen-year mortgages also declined during the month.
What I am seeing locally here in the Bay Area is that these national trends matter because many of our borrowers still carry loans backed by Fannie and Freddie, and when forbearance and modification activity cools while delinquencies climb, it signals stress in the market. The uptick in borrowers falling behind and the decline in refinance opportunities suggests some households are facing real challenges, particularly in a market like ours where housing costs remain elevated. This data reminds us all that economic headwinds can shift quickly, and the tools available to help struggling borrowers are only as useful as the borrowers who know about them and reach out.
