A recent announcement from Freddie Mac revealed that delegation agreements were signed by nine home loan insurance companies, which will help mortgage servicers push through short sales and related items.
The decision, which goes into effect November 1, will help deeds also avoid foreclosure without the approvals from the insurers, the announcement noted. This could cut expenses significantly, as well as lessen delays and other lingering issues with the short sale situation. Additionally, this will aid homeowners who want to prevent their home from being foreclosed.
"We applaud the nation's mortgage insurers for committing to work with us and our servicers to help more borrowers obtain short sales and other foreclosure alternatives," said Tracy Mooney, senior vice president of servicing and REO for Freddie Mac. "By paving the way for more borrowers to avoid foreclosure, today's announcement will support the housing recovery and help reduce taxpayer losses."
With this decision, the government-sponsored enterprise increased its efforts to help the level of short sales rise around the country, it noted. This is because it will help cut down on the high level of foreclosures. The overall objective of this step to improve short sales will better equip mortgage servicers looking to help out borrowers.
Additionally, Freddie Mac noted that its Congressional charter specifies that private mortgage insurance must be used for some home loans. This includes when the mortgage's down payment totals less than one-fifth of the home's value currently being paid off.
Foreclosures decline significantly in September
An increase in short sales may have helped the level of foreclosures decline in September. According to property data from RealtyTrac, the level of foreclosure filings fell 7 percent compared to August's figures.
Overall, fewer than 181,000 foreclosures were registered during the month, real estate records recorded in the firm's U.S. Foreclosure Market Report showed. This was 16 percent lower than the same month in 2011, as well as the lowest level in more than five years.
The total filings of foreclosure actions during the third quarter totaled 531,576, which was 5 percent lower than the previous three months, the report noted. Additionally, it was 13 percent lower than in 2011. The decline in foreclosure levels reached nine quarters in a row in September. One in every 248 homes registered foreclosures during that quarter.