Fannie Mae’s Mortgage Portfolio Contracts at Double-Digit Rate for Third Straight Month

Though the value of Fannie Mae‘s Book of Business remained relatively flat from May to June, the GSE’s gross mortgage portfolio took another tumble, falling another $5 billion down to a total value of about $390 billion, according to Fannie Mae’s June 2015 Monthly Volume Summaryreleased Friday.

June was the third consecutive month in which the gross mortgage portfolio contracted at a double-digit annualized rate following March’s expansion at a rate of 7.8 percent. In April, the portfolio contracted at an annualized rate of 17.4 percent; in May, it contracted at a rate of 25.9 percent as the total value fell below $400 billion for the first time since the conservatorship began in September 2008; and in June, the portfolio shrank at a compound annualized rate of 13.8 percent.

The March expansion was a rare one for Fannie Mae’s gross mortgage portfolio in the last five years; the portfolio has expanded only three times in the last 60 months dating back to June 2010 (March 2015, January 2015, and December 2012). The value of the portfolio has declined by more than half since June 2010, from $818 billion that month down to $390 billion in June 2015. It has declined by more than $21 billion just since March 2015, when the value was $411.7 billion.

The value of Fannie Mae’s Book of Business stayed relatively flat at $3.110 trillion from May to June following a contraction at an annualized rate of about 2.6 percent from April to May. The 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, contracted at an average compound annualized rate of 0.09 percent this year.

The total value of Fannie Mae’s mortgage-backed securities and other guarantees for June was $2.81 trillion, a slight increase from May’s level of $2.809 trillion. The value of mortgage-backed securities in the portfolio as of June 30, 2015, was $92.8 billion, down from $94.9 billion in May.

The single-family serious delinquency rate for Fannie Mae in June fell another four basis points down to 1.66 percent, its lowest point since before the recession. The single-family serious delinquency rate on Fannie Mae-backed single-family residential mortgage loans has declined every quarter since Q1 2010.

Fannie Mae completed 8,356 loan modifications in June, a slight decline from the 8,597 loan mods completed in May. Fannie Mae has completed 52,914 loan mods for the first six months of 2015, an average of 8,819 per month. For the full year of 2014, Fannie Mae completed 122,823 loan mods, a monthly average of 10,235.

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