In November, Fannie Mae’s gross mortgage portfolio experienced a third consecutive month of contraction following a rare expansion in August, according to Fannie Mae's November 2016 Monthly Volume Summary.
November’s annual contraction rate of 37.1 percent was the highest since the portfolio shrank at a rate of 32 percent in May 2016, according to Fannie Mae. With the contraction, the unpaid principal balance of the portfolio was $289.46 billion as of the end of November 2016.
The contraction of Fannie Mae’s gross mortgage portfolio in November calculated to an over-the-month decline of approximately $11.5 billion in UPB, with the combination of sales and liquidations ($39.8 billion) outpacing purchases during the month ($28.3 billion), according to Fannie Mae. For the first 11 months of 2016, the portfolio has shrunk at an average rate of 17.5 percent (the rate was 16.5 percent for November 2015).
Fannie Mae's total book of business, which includes the gross mortgage portfolio plus total Fannie Mae mortgage-backed securities and other guarantees minus Fannie Mae MBS in the portfolio, increased at a compound annualized rate of 3.1 percent in November up to a value of approximately $3.137 trillion. The total book of business has expanded in all but three of the first 11 months of 2016.
For the last six and a half years, Fannie Mae has been trying to wind down its gross mortgage portfolio; during that time, it has rarely seen monthly expansion. In August 2016, Fannie Mae’s gross mortgage portfolio experienced a rare expansion, increasing at an annual rate of 9.1 percent. It was only the fifth time the portfolio had expanded since June 2010. The four months prior to August in which the portfolio grew were January 2016, March 2015, January 2015, and December 2012. At the beginning of that stretch in June 2010, the amount of unpaid principal balance (UPB) of the loans in the portfolio was $818 billion.
Click here to view Fannie Mae’s entire Monthly Volume Summary for November.