Connecticut had one of the highest rates of homeowners with Fannie Mae or Freddie Mac mortgages more than 90 days delinquent during the first half of 2020, according to the Federal Housing Finance Agency.

The FHFA’s quarterly Foreclosure Prevention and Refinance Report showed that 3.7 percent of the 332,164 Connecticut mortgages held by one of the government-sponsored enterprises, Fannie Mae or Freddie Mac, were considered in serious delinquency through June 30. Connecticut had the fifth-highest rate, trailing New York, New Jersey, Florida and Nevada. New York’s rate was 5 percent.

Nationwide, the GSE’s serious delinquency rate was 2.58 percent at the end of the second quarter on nearly 28.5 million loans. This compared with 7.96 percent for Federal Housing Administration loans, 3.98 percent for Veterans Affairs loans, and 4.26 percent for all loans (the industry average), according to the FHFA.

Last year, only 1 percent of Connecticut’s 330,000 GSE loans were considered in serious delinquency during the first six months of the year. The national average then was 0.7 percent.

Connecticut overall had 24,575 delinquent GSE mortgages in the first six months of 2020, representing 7.4 percent of the state’s Fannie and Freddie loans.

Most of the GSE’s delinquent loans are in forbearance. Nationwide, about 1.6 million mortgages are delinquent. In the second quarter alone, the GSEs initiated 1.5 million forbearance actions, while an additional 170,000 had been initiated in the first quarter.

The FHFA said in a statement that the majority of the forbearance actions occurred because of the GSE’s response to COVID-19 impacts. The GSEs are currently not reporting forbearance plans to credit bureaus as delinquent.

The total number of loans in forbearance plans nationwide at the end of the second quarter was 1.39 million, about 4.95 percent of the nearly 28.5 million loans serviced by the GSEs.
The GSEs also completed 13,991 loan modifications in the second quarter, with 41 percent reducing borrowers’ monthly payments by more than 20 percent.

The GSEs have taken 3,639 foreclosure prevention actions in Connecticut through June 2020 compared to about 1,100 at the same time last year. More than 2,800 of those needing foreclosure prevention in Connecticut in the first six months of 2020 were placed in forbearance plans. Nationwide, the GSEs took almost 279,000 foreclosure prevention actions through June 30, including 252,000 in the second quarter.

The pandemic has also seen homeowners take advantage of low interest rates. The FHFA said falling interest rates led to refinance volume nationwide in June 2020 at levels last observed in 2013. In total more than 1.5 million mortgages were refinanced in the second quarter nationwide, compared to about 747,000 in the first quarter.

“The percentage of cash-out refinances decreased to 27 percent in June from 28 percent in May,” the FHFA said in its report. “Mortgage rates have continued to fall, creating more opportunities for non cash-out borrowers to refinance at lower rates and lower their monthly payments.”