text: GSEs’ Short Sales and Deeds-in-Lieu up 27% in Q2
  
  Nearly 31,000 borrowers with Fannie Mae and Freddie Mac loans forfeited their homes through a short sale or deed-in-lieu of foreclosure during the second quarter of this year. The figure represents a 27 percent increase over the previous three-month period.
  The GSEs also reported that their volume of permanent modifications under the administration's Home Affordable Modification Program (HAMP) increased 65 percent, but at the same time, foreclosure starts and foreclosure sales were also up by double digits.
  
  Nearly 31,000 borrowers with ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com loans forfeited their homes through a short sale or deed-in-lieu during the second quarter of this year.
  
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  The figure represents a 27 percent increase over the 24,000 short sale and deed-in-lieu transactions completed by the GSEs during the previous three-month period.
  
  Short sales grabbed the lionÃ¢â‚¬â„¢s share of the Q2 home forfeiture activity. Fannie and Freddie servicers completed 29,000 short sales last quarter. During the same period last year, the GSEsÃ¢â‚¬â„¢ short sale tally was just 11,700. Two years ago, it was 3,000.
  
  According to a ""report released Friday"":http://www.fhfa.gov/webfiles/16687/2q10fprfinal.pdf by the two mortgage giants' regulator, the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA), the GSEs' are continuing to utilize these foreclosure alternatives ""to reduce foreclosure-related costs and to minimize the impact of foreclosures on borrowers, communities, and neighborhoods.""
  
  FHFA also reported that loan modifications and refinancings by Fannie Mae and Freddie Mac were up in the second quarter. The volume of permanent modifications under the administrationÃ¢â‚¬â„¢s Home Affordable
  
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  Modification Program (HAMP) increased 65 percent, while refinancings under the Home Affordable Refinance Program (HARP) increased by 30 percent.
  
  Servicers completed 171,200 permanent loan modifications on Fannie and Freddie loans during the quarter, the majority of which were through HAMP. Nearly 88,600 GSE borrowers in HAMP trials transitioned to permanent mods during the second quarter, bringing the two companies cumulative HAMP number since the program was launched in March of last year to nearly 225,000.
  
  According to FHFAÃ¢â‚¬â„¢s report, approximately 202,000 of the GSEsÃ¢â‚¬â„¢ borrowers were in a HAMP trial period at the end of the second quarter, compared to nearly 448,100 at the end of the first quarter. That means minus the 88,600 that were converted to permanent, 157,500 homeownersÃ¢â‚¬â„¢ HAMP trials were cancelled as a result of missed payments or inadequate documentation.
  
  FHFA says loans modified in the last two quarters are performing Ã¢â‚¬Å“substantially betterÃ¢â‚¬Â than earlier modifications, with less than 10 percent of those restructured during the last six months 60-plus-days delinquent three months after modification. The agency also noted that more than half of the loan modifications completed in Q2 lowered borrowersÃ¢â‚¬â„¢ monthly payments by more than 30 percent.
  
  While the GSEsÃ¢â‚¬â„¢ loss mitigation actions are steadily increasing, foreclosures too are on the rise, though not as sharply.
  
  The two companies initiated 275,100 new foreclosures last quarter, an increase of 12 percent.
  
  Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.