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Fannie Mae’s Mortgage Portfolio Continues Rapid Contraction

fannie-maeFannie Mae’s gross mortgage portfolio contracted for the seventh consecutive month in October and the eighth time in 10 months year-to-date in 2015, according to Fannie Mae's October 2015 Monthly Volume Summary.

The value of Fannie Mae’s gross mortgage portfolio declined by about $6.2 billion month-over-month, from $370.4 billion in September down to $364.2 billion in October, which calculated to a compound annualized rate of decline of 18.3 percent. The lowest rate of contraction for one month in 2015 was 13.8 percent reached in June. Overall, the portfolio has contracted at an annualized rate of 14.1 percent for the first 10 months of 2015.

The gross mortgage portfolio expanded in January and March of 2015 at rates of 3.5 percent and 7.8 percent, respectively, but has contracted in every other month this year. The portfolio has expanded in only three months out of the last 64 since June 2010 (March 2015, January 2015, and December 2012). At the beginning of that stretch in June 2010, the portfolio's value was $818 billion. At the start of 2015, the portfolio's value was $414.8 billion.

Despite the contraction of the gross mortgage portfolio, Fannie Mae’s Book of Business expanded at a compound annualized rate of 0.4 percent in October, the fourth time in 10 months this year it has expanded. The Book of Business has contracted at an average compound annualized rate of 0.7 percent for the first 10 months of 2015. At the end of October, the Book of Business was valued at $3.104 trillion after the expansion. The total value of Fannie Mae's mortgage-backed securities and other guarantees for October was $2.823 trillion, an increase from September’s total of $2.818 trillion.

The serious delinquency rate on single-family mortgage loans backed by Fannie Mae declined by one basis point down to 1.58 percent in October, still well below its pre-crisis level and less than half the national average reported by CoreLogic in September (3.4 percent). The serious delinquency rate on Fannie Mae-backed single-family mortgage loans has declined every quarter since Q1 2010.

The number of loan modifications completed by Fannie Mae was down slightly over the month, from 7,064 in September down to 6,882 in October. Year-to-date as of the end of October, Fannie Mae has completed 81,995 loan mods, an average of 8,199 per month. Fannie Mae completed an average of 10,235 loan mods per month for the full year of 2014.

Click here to see the full October 2015 Monthly Volume Summary for Fannie Mae.

12-1 Fannie Mae MVS graph

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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