Delinquencies Down, Down, Down

Serious delinquency rates are down for both Fannie Mae and Freddie Mac, according to the two Enterprises’ most recent summary reports. In June, Fannie’s serious delinquency rate dropped three basis points—down to 1.01 percent—while Freddie’s rate fell to 0.85 percent—its lowest point since 2008.

Overall, Fannie Mae’s book of business has increased 2.9 percent over the year. Its mortgage portfolio balance ticked up nearly $10 million, clocking in at $316 billion by the end of June. The GSE completed 7,587 loan modifications for the month.

Freddie’s guarantee portfolio experienced solid growth as well, rising 6 percent for the year, while its total investments portfolio and mortgage-related investments portfolio dropped, declining 11 percent and 12 percent from June 2016, respectively.

Of its total guarantee portfolio, 75 percent is comprised of mortgage loans, marking an increased share of 6 percentage points from one year prior. Purchase volume is down, however, dropping 20 percent in the last 12 months due to declining refinance activity.

Donald H. Layton, CEO of Freddie Mac, said he is proud of the work his team is doing—and the success Freddie has had in improving the nation’s housing finance system.

“Our continued very solid financial results and strong business fundamentals reflect the company’s transformation into a well-run commercial enterprise,” Layton said. “This transformation is enabling us to better deliver on the mission that is our purpose—to provide liquidity, stability, and affordability to the American primary mortgage market. We’re doing that by helping lenders of all sizes compete which, in turn, expands affordable housing opportunities for borrowers and renters nationwide.”

Freddie’s recent focus on transferring credit risk has also helped the Enterprise better serve American homebuyers, Layton said.

“Through our award-winning credit risk transfer programs, we’re fulfilling our mission with much less risk to taxpayers than in the past.

The GSE has transferred risk on $105 billion in loans to date, accounting for about 33 percent of its total outstanding single-family guarantee portfolio—a seven percentage point jump from June 2016.

See the full reports at FannieMae.com and FreddieMac.com.