Fannie Mae's gross mortgage portfolio contracted in February after a rare expansion in January, according to Fannie Mae's February 2015 Monthly Volume Summary released Tuesday. The GSE's Book of Business also declined in February, decreasing at a compound annualized rate of 0.1 percent.
The gross mortgage portfolio declined at a compound annualized rate of 14.5 percent in February (down to $409 billion) after expanding at a rate of 3.5 percent in January. The portfolio has now contracted in 54 of the last 56 months dating back to June 2010. The only two months during that time the portfolio expanded were December 2012 and January 2015, according to Fannie Mae. In June 2010, the gross mortgage portfolio's value was $818 billion.
Fannie Mae's total Book of Business, which 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, decreased at a compound annualized rate of 0.1 percent in February, down to $3.1214 trillion. It was the second consecutive month of contraction for Fannie Mae's Book of Business after expanding for three out of four months between September and December.
The total value of Fannie Mae's mortgage-backed securities and other guarantees for February was $2.805 trillion, a slight increase from January's level of $2.802 trillion. The end balance of mortgage-backed securities in the portfolio as of February 28, 2015, was $93.4 billion, an increase from $95.6 billion in January.
The single-family serious delinquency rate for Fannie Mae in February fell another three basis points down to 1.83 percent after dropping to a nine-year low of 1.86 percent in January. Fannie Mae's single-family serious delinquency rate has declined every quarter since the first quarter of 2010 due to a number of reasons that include foreclosure alternatives, home retention solutions, completed foreclosures, improved loan payment performance, and acquisitions of loans with stronger credit profiles. According to Fannie Mae, loans acquired since 2009 (after the housing bubble burst) have stronger credit profiles – and those loans make up 81 percent of the loans in Fannie Mae's portfolio.
Meanwhile, Fannie Mae completed 8,472 loan modifications in February, down slightly from the 8,746 loan mods the GSE completed in January. For the full year of 2014, Fannie Mae completed 122,823 loan mods, an average of 10,235 per month.