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With the results of Freddie Mac’s third quarter earnings are set to come out Wednesday, November 2nd, what did the latest Monthly Volume Summary hold for the GSE?
Freddie Mac’s annualized rate for total mortgage portfolio in September grew 2.7 percent, a slowing growth compared to the amount that the GSE increased last month. Fannie Mae is set to release its monthly statement later this month.
The mortgage-related investments portfolio for Freddie Mac contracted at an annual rate of 2.7 percent. The contraction left the aggregate unpaid principal balance of the portfolio at $308.1 billion as of the end of September, which is over $30 billion lower than the 2016 cap of $339.3 billion, which is the amount the portfolio must reach by the end of the year as part of its required reduction. Fannie Mae, met its year-end goal for reducing its mortgage portfolio in March.
The value of Freddie Mac’s mortgage-related investments portfolio has declined by approximately $38.8 billion since the end of September 2015, when the aggregate UPB of the portfolio was $346.9 billion. For the past eight months of 2016, the portfolio has contracted at an average rate of 14.9 percent and has contracted in all but two of the last 13 months (December and January).
Freddie Mac’s single-family refinance-loan purchase and guarantee volume for September was $23.6 billion, which represented nearly 60 percent of total single-family mortgage portfolio purchases or issuances during the month. Relief refinance mortgages comprised approximately 5 percent of Freddie Mac’s total single-family refinance volume. The serious delinquency rate on mortgages backed by Freddie Mac decreased a basis point month-over-month from 1.03 to 1.02 percent.
The number of loan modifications completed on Freddie Mac-backed loans totaled 2,720, which brings the year-to-date total (as of September 30) up to 31,587.
Freddie Mac reported a net income of $1 billion in the second quarter, which was a vast improvement from the loss seen in the first quarter of 2016. The reduction of the mortgage portfolio and the wind-down of the GSEs’ capital buffer, which is required to be at zero by January 1, 2018, is likely to result in more calls for GSE reform as the Obama Administration draws to a close.
