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Freddie Mac’s Serious Delinquency Rate Plummets Further

freddie-mac-twoFollowing January's slight uptick in the percentage of seriously delinquent single-family loans in Freddie Mac's mortgage portfolio, the serious delinquency rate returned in February to doing what it has been doing for most of the last six years—substantially declining.

The share of loans in Freddie Mac's portfolio that are seriously delinquent (90 days or more overdue or in foreclosure) fell by eight basis points from January to February, down to 1.25 percent, after inching up by one basis point from December to January, according to Freddie Mac [1]'s February 2016 Monthly Volume Summary [2] released on Thursday.

February's serious delinquency rate for single-family loans backed by Freddie Mac was only three basis points higher than the rate than in September 2008, when the GSEs were taken into conservatorship by the FHFA. The February 2016 rate is a decline of 56 basis points over-the-year (1.81 percent in February 2015), and the rate has been on the steady decline since peaking in 2010.

According to FHFA's Foreclosure Prevention Report for Q4 2015 [3], the GSEs had a combined total of 408,429 seriously delinquent single-family mortgages in their portfolios, down from 426,112 in the previous quarter.

Freddie Mac's total mortgage portfolio expanded at a compound annualized rate of 1.8 percent in February, marking the 12th time in the last 13 months the portfolio has expanded (the exception was in November, when it contracted at a rate of 0.4 percent). The balance of the total mortgage portfolio was $1.947 trillion at the end of February, having increased by about $39 billion since January 2015, according to Freddie Mac.

The aggregate unpaid principal balance (UPB) of Freddie Mac's mortgage-related investments portfolio contracted at an annualized rate of 10.1 percent in February (computing to a monthly decline of about $3 billion, down to a balance of about $346.6 billion). The mortgage-related investments portfolio has now contracted at an annualized rate of 0.4 percent for the first two months of 2016 after contracting at a rate of 15.1 percent in 2015.

Click here [2] to view Freddie Mac's February 2016 Monthly Volume Summary.

3-31 MVS