Fannie Mae and Freddie Mac boosted loan modifications by 76 percent in the last three months of 2008, but nearly doubled their inventories of real estate-owned properties over the course of the year as the companies eschewed short sales and seized properties faster than they could sell them.
During the last three months of 2008, loan modifications were approved for 23,777 loans owned or guaranteed by Fannie and Freddie, a 76 percent increase from the previous three months.
But over the course of the year, the mortgage giants repossessed about eight homes for every short sale they conducted.
Fannie and Freddie’s loan servicers agreed to 16,718 short sales in 2008, while the companies repossessed 145,183 homes, their annual reports showed.
By the end of the year, the companies were saddled with real estate-owned (REO) inventory of 92,884 homes — nearly twice the 48,123 properties on hand at the end of 2007.
Although Fannie Mae was able to sell 64,843 repossessed homes in 2008, it acquired 94,652 through foreclosure, leaving it with REO inventory of 63,538 homes at year end — an increase of 152 percent from the end of 2006.
Freddie Mac sold 35,579 homes in 2008, but repossessed 50,531. The company’s REO inventory ballooned from 14,394 homes at the beginning of the year to 29,346 homes by year end — a 334 percent increase from the end of 2006.