The percentage of home loans 90 or more days past due held by the nation's two largest mortgage companies has declined yet again.[IMAGE]
According to Fannie Mae's latest ""monthly summary report"":http://www.fanniemae.com/ir/pdf/monthly/2010/073110.pdf;jsessionid=CTRISDYNENHARJ2FQSHSFGQ, the GSE's single-family serious delinquency rate fell 16 basis points in June to 4.99 percent. It's the fourth straight month that Fannie has reported a decline and the first time since October 2009 that the rate has fallen below the 5 percent mark.
Freddie Mac's ""monthly report"":http://www.freddiemac.com/investors/volsum/pdf/0710mvs.pdf shows that its serious delinquencies dropped 7 basis points to 3.89 percent in July. The rate has fallen for four out of the previous five months; it held flat during the month of May.
(Fannie Mae's reporting of its past-due numbers lags sibling Freddie Mac by one month.)[COLUMN_BREAK]
On the surface, the reciprocated declines in overdue mortgages are a welcome herald, but some researchers have suggested that the improvements are merely the consequence of an increase in GSE foreclosures.
The analytics firm ""Lender Processing Services"":http://dsnews.comarticles/lps-data-shows-gse-foreclosure-starts-are-accelerating-2010-07-27 (LPS) reports that both Fannie and Freddie have stepped up efforts to move borrowers from the 90-day delinquency bucket to foreclosure over the past few months as Treasury has pressed servicers to clean up the Home Affordable Modification Program (HAMP) and move aged trials to the next phase Ã¢â‚¬" either into a permanent modification or out of the program.
The Treasury's ""latest HAMP report card"":http://dsnews.comarticles/new-hamp-report-disappoints-as-half-fall-out-of-trial-program-2010-08-20 indicates that most homeowners are experiencing the latter. As of the end of July, nearly half of the homeowners approved for trial modifications have fallen out of the program Ã¢â‚¬" 616,839 to be exact.
A ""recent study by Standard and Poor's"":http://dsnews.comarticles/gses-foreclosure-pipelines-will-grow-well-into-2011-sp-2010-08-23 notes that both Fannie and Freddie have indeed been working hard to find sustainable workouts for delinquent borrowers Ã¢â‚¬" each has already completed about 40 percent more workout volume during the first half of 2010 than they did in all of 2009. But despite their efforts, S&P says delinquency volumes are so great that the two companies will grapple with expanding foreclosure pipelines and REO inventories well into 2011.
Both GSEs' multifamily serious delinquency rates rose in their latest summary reports. Fannie's was up 4 basis points to 0.80 percent in June. Freddie increased 2 basis points to 0.30 percent in July.