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Fannie Mae’s Mortgage Portfolio Contracts 19 Percent in August

stock-charts-graphsFannie Mae's gross mortgage portfolio declined at a compound annualized rate of 19.1 in August, marking the sixth time in the last seven months that the portfolio has contracted at the rate of at least 13 percent, according to Fannie Mae's August 2015 Monthly Volume Summary released Wednesday.

For the first eight months of 2015, Fannie Mae's gross mortgage portfolio has contracted at an annualized rate of 12.6 percent; the only two months that saw expansion were January and March at a rate of 3.5 percent and 7.8 percent, respectively.

The balance of the gross mortgage portfolio at the end of August was $377.9 billion, compared to $384.6 billion at the end of July. It has seen expansion in only three months out of the last 62 since June 2010 (March 2015, January 2015, and December 2012). At the beginning of that stretch in June 2010, the portfolio's value was $818 billion. At the start of 2015, the portfolio's value was $414.8 billion.

The good news for Fannie Mae is that the serious delinquency rate on single-family mortgage loans is still well below its pre-crisis levels after declining by one basis point in August down to 1.62 percent. The serious delinquency rate on Fannie Mae-backed single-family mortgage loans has declined every quarter since Q1 2010. At 1.62 percent, it is less than half of the national average of 3.4 percent reported by CoreLogic for July.

Along with the contraction of the gross mortgage portfolio, however, Fannie Mae's Book of Business also declined. The Book of Business includes the gross mortgage portfolio plus the total Fannie Mae mortgage-backed securities and other guarantees less the Fannie Mae mortgage-backed securities in the portfolio. In August, the Book of Business decreased at a compound annualized rate of 2.1 percent, and has now decreased at an annualized rate of 1.1 percent for the first eight months of 2015. The total value of the Book of Business after August's contraction was $3.101 trillion. The total value of Fannie Mae's mortgage-backed securities and other guarantees for August was $2.811 trillion, a slight increase from July's total of $2.813 trillion.

The number of loan modifications completed by Fannie Mae was down slightly, from 7,245 in August, down from 8,356 in July. Year-to-date as of the end of August, Fannie Mae has completed 68,049 loan mods, an average of 8,506 per month. Fannie Mae completed an average of 10,235 loan mods per month for the full year of 2014.

9-30 MVS chart

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.

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