Fannie Mae and Freddie Mac are effectively buying down the mortgages of distressed borrowers to prevent foreclosures

See America’s ‘Buy Now, Pay Later’ Economy by Allysia Finley. Excerpts:

"About 69% of borrowers who took out a mortgage insured by the Federal Housing Administration last year had debt-to-income ratios that are considered risky, compared with 28% in 2012. For Fannie Mae and Freddie Mac, the share was 38%, up from 16% in 2012.

More borrowers are struggling to pay mortgages, yet it isn’t apparent by official delinquency rates. The reason? The government and Fannie Mae and Freddie Mac are effectively buying down the mortgages of distressed borrowers to prevent foreclosures.

The FHA has waived or reduced monthly payments on nearly 1.2 million mortgages over the past two years—about 15% of its portfolio. Without such forgiveness, delinquencies would be near the levels of the 2008-09 meltdown. Fannie and Freddie have also been slashing and deferring payments on hundreds of thousands of mortgages."