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Fannie Mae’s Mortgage Portfolio Is Back to Contracting

Investigation One BHFannie Mae [1]’s gross mortgage portfolio saw a contraction of 16.3 percent this month after experiencing its first expansion last month since January of this year. With this contraction, the GSE remains below its 2016 cap of $339.3 billion. Additionally, serious delinquency remained flat at 1.24 percent, according to Fannie Mae's September 2016 Monthly Volume Summary.

With the stagnant rate seen for Fannie Mae’s serious delinquency, or the share of loans backed by Fannie Mae that were seriously delinquent, Fannie Mae also reports 6,355 completed loan modifications, a dive down from August’s 7,489.

The 16.3 percent rate of shrinkage largely contrasts with the rate of enlargement experienced in August at 9.1 percent. With this decrease, the aggregate unpaid principal balance (UPB) of Fannie Mae’s gross mortgage portfolio was $306.54 billion at the end of the month—down by about $4.59 billion from August, according to Fannie Mae. The portfolio has declined at an annual rate of 14.6 percent over the past nine months of 2016.

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 4.0 percent in September up to a value of about $3.123 trillion.

In January 2016, Fannie Mae’s gross mortgage portfolio experienced a rare expansion, increasing at an annual rate of 5 percent. With August’s increase, the portfolio has now seen this rarity twice this year as well as in five months since June 2010. The four months prior to August in which the portfolio expanded 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 the complete Monthly Volume Summary for September. [2]