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Freddie Mac’s Mortgage Portfolio Experiences Rare Contraction

rates.dropFreddie Mac’s total mortgage portfolio contracted at a compound annualized rate of 0.4 percent in November, ending a string of nine consecutive months of expansion, according to Freddie Mac’s November 2015 Monthly Volume Summary.

Expansion was rare for Freddie Mac’s mortgage portfolio for the post-crisis years of 2010 through the first half of 2014—in fact, for the entire year of 2014, the portfolio contracted at an annualized rate of 0.2 percent. January 2015 started out much the same way, with the portfolio contracting at a rate of 0.8 percent.

What followed was nine consecutive months of expansion, however, broken up by November’s contraction at a rate of 0.4 percent. The portfolio has now expanded at an average annualized rate of 1.2 percent for the first 11 months of 2015.

The 0.4 percent contraction rate for November calculated to an over-the-month decline of approximately $629 million. The value of Freddie Mac’s total mortgage portfolio at the end of November stood at $1.9319 trillion.

The serious delinquency rate on single-family residential loans backed by Freddie Mac declined another two basis points from 1.38 percent down to 1.36 percent over-the-month in November. The rate is now 16 basis points below what it was in November 2008, at the start of the financial crisis. By comparison, CoreLogic reported a nationwide serious delinquency rate in November of more than double the rate for loans backed by Freddie Mac (3.3 percent).

Despite all the expansion for Freddie Mac’s mortgage portfolio in the second half of 2014 and most of 2015, the portfolio expanded only 21 times in the last 71 months from January 2010 to November 2015. At the beginning of the 15-month period (July 2014) that saw 14 months of expansion, the portfolio was valued at $1.895 trillion. It has expanded by about $37 billion since then.

Freddie Mac completed 2,951 loan modifications in November and has completed 50,074 for the first 11 months of 2015 for an average of 4,552 per month. By comparison, Freddie Mac completed 5,596 loan modifications per month for the full year of 2014.

Click here to view the Freddie Mac’s entire November 2015 Monthly Volume Summary.

1-18 Freddie Mac Graphic

 

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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