Fannie Mae, Freddie Mac foreclosures slow-regulator

NEW YORK (Reuters) - Fannie Mae and Freddie Mac, the largest providers of funding for U.S. home mortgages, slowed the pace of foreclosures on delinquent loans for the second straight quarter, their regulator said on Tuesday.

Foreclosure proceedings as a percentage of loans at least 60 days delinquent declined to 7.12 percent in the third quarter from 7.81 percent in the second quarter, and 8.29 percent in the first three months of 2008, the Federal Housing Finance Agency said in a report.

But delinquent mortgages, including those in bankruptcy and foreclosure, as a percentage of all loans, rose to 2.21 percent as of Sept. 30 from 1.73 percent in June, the FHFA said.

The two government-controlled companies have pledged to reduce foreclosures, which have ripped apart the housing market and are worsening the U.S. economic recession. Methods used include easing payments through loan modification, short sales and unsecured loans.

Loan modifications by Fannie Mae (FNM.P) and Freddie Mac (FRE.P) declined, but loans reinstated by the former's HomeSaver Advance loan program jumped to 27,277 last quarter from 16,658 in the second quarter, the FHFA said.

The companies also increased short sales last quarter, ending with 1,721 in September, compared with the year-to-date average of 1,057, FHFA data showed.

(Reporting by Al Yoon; Editing by Dan Grebler)