FHFA Says Fannie and Freddie Completed 48,439 Foreclosure-Prevention Actions in Q2

Share this article!

Fannie Mae and Freddie Mac completed 48,439 foreclosure-prevention actions during the second quarter of 2026, according to a new Federal Housing Finance Agency report that offers a fresh look at borrower distress as mortgage rates move back above 7%.

The actions brought the cumulative total since the enterprises entered conservatorship in September 2008 to 7.43 million. FHFA said 6.72 million of those actions helped borrowers remain in their homes, including 2.87 million permanent loan modifications.

Forbearance remained a small share of the servicing book

Newly initiated forbearance plans declined to 26,906 in the second quarter from 27,477 in the first quarter. At June 30, 37,283 enterprise loans remained in forbearance, representing about 0.12% of total loans serviced and 6.51% of delinquent loans.

That matters because forbearance totals can provide an early signal of stress before loans move deeper into delinquency or foreclosure. The second-quarter decline in new plans does not eliminate affordability pressure, but it shows that broad-based forbearance use remained limited across the Fannie-Freddie book.

Principal forbearance dominated modifications

FHFA said 63% of second-quarter loan modifications included principal forbearance. Extend-term-only modifications accounted for 35.7% of modifications.

Principal forbearance generally allows a portion of the unpaid balance to be deferred rather than immediately amortized through the borrower’s monthly payment. The structure can reduce the payment burden without forgiving principal, though the deferred amount remains part of the borrower’s obligation.

Why the report matters now

The data cover April through June and therefore predate the latest rise in borrowing costs. Freddie Mac’s weekly survey put the average 30-year fixed mortgage at 7.03% for the week ending Sept. 24, the first reading above 7% since January 2025.

Higher rates do not automatically translate into defaults, particularly for existing owners with fixed-rate mortgages originated at lower rates. They can, however, make refinancing more difficult for distressed borrowers and raise the cost of moving for households that need to sell and finance another home.

For servicers, the second-quarter report provides a baseline as the market heads into the final months of 2026. The next reports will show whether the renewed rate shock is beginning to appear in forbearance, modification and foreclosure-prevention volumes.