Fannie Mae Delinquences Continue to Climb

by devteam November 25th, 2009 | Share

Activity in Fannie Mae’s portfolios declined according to most metrics during the month of October as compared to September. Delinquency rates reported, however, continued to increase.

In their monthly summary, Fannie Mae reported the corporation’s Book of Business declined at a compound annualized rate of (3.1) percent during the month.  The current Book of Business is $3.23 trillion, an increase 4.8 percent thus far in 2009.

The retained portfolio declined 27.8 percent to $771.5 billion during October.  The portfolio has declined 2.4 percent thus far in 2009.  The principal decline was in non-Fannie Mae Agency Securities which dropped from $60.6 billion to $49.4 billion.  Mortgage loans increased by about $5 billion and non-Agency securities decreased a little over $5 billion.  Fannie Mae, along with Freddie Mac is mandated to reduce its portfolio by 10 percent a year beginning in 2010 until the portfolio of each corporation reaches $250 billion.

The corporation issued $40.7 billion in Mortgage Backed Securities in October compared to $59.3 billion in September.  Liquidations were $41.1 billion and $44.6 billion respectively.  The annualized liquidation rate for October was 17.7 percent.

Commitments to purchase totaled $64.5 billion and commitments to sell were $60.6 billion compared to $69.7 billion and $61.8 billion respectively in September.  Net retained commitments during the month were 3.9 billion and are $45.1 billion for the year.

Market Value Sensitivity at 50 bp rate level shock was (0.5) compared to (0.8) in September and at 25 bp it was unchanged at (0.2).  The effective duration gap was (1) month compared to (2) months in September.

Serious delinquencies in the portfolio – defined as 60 days or more overdue or in foreclosure – are reported by Fannie Mae one month behind other data.  The September rate reached 4.72 percent for single family mortgages compared to 4.45 percent in August and 1.72 percent one year earlier.  Non credit enhanced mortgages had a 3.09 percent rate and 12.16 percent of mortgages with mortgage insurance (credit enhanced mortgages) were delinquent compared to 2.87 percent and 11.52 percent respectively in August and 0.96 percent and 4.68 percent in September 2008.  The multi-family portfolio had a delinquency rate of 0.62 percent compared to 0.56 percent and 0.16 percent in earlier reporting.rnrnrnrnrnrnrnrn Normalrn 0rn falsern falsern falsern EN-USrn X-NONErn X-NONErn MicrosoftInternetExplorer4rn <!–rn /* Font Definitions *n @font-facern{font-family:”Cambria Math”;rnpanose-1:2 4 5 3 5 4 6 3 2 4;rnmso-font-charset:0;rnmso-generic-font-family:roman;rnmso-font-pitch:variable;rnmso-font-signature:-1610611985 1107304683 0 0 159 0;}rn@font-facern{font-family:”Century Gothic”;rnpanose-1:2 11 5 2 2 2 2 2 2 4;rnmso-font-charset:0;rnmso-generic-font-family:swiss;rnmso-font-pitch:variable;rnmso-font-signature:647 0 0 0 159 0;}rn /* Style Definitions *n p.MsoNormal, li.MsoNormal, div.MsoNormalrn{mso-style-unhide:no;rnmso-style-qformat:yes;rnmso-style-parent:””;rnmargin-top:0in;rnmargin-right:0in;rnmargin-bottom:10.0pt;rnmargin-left:0in;rnline-height:120%;rnmso-pagination:widow-orphan;rnfont-size:10.0pt;rnfont-family:”Century Gothic”,”sans-serif”;rnmso-ascii-font-family:”Century Gothic”;rnmso-ascii-theme-font:minor-latin;rnmso-fareast-font-family:”Century Gothic”;rnmso-fareast-theme-font:minor-latin;rnmso-hansi-font-family:”Century Gothic”;rnmso-hansi-theme-font:minor-latin;rnmso-bidi-font-family:”Times New Roman”;rnmso-bidi-theme-font:minor-bidi;rnmso-bidi-language:EN-US;rnfont-style:italic;}rn.MsoChpDefaultrn{mso-style-type:export-only;rnmso-default-props:yes;rnmso-ascii-font-family:”Century Gothic”;rnmso-ascii-theme-font:minor-latin;rnmso-fareast-font-family:”Century Gothic”;rnmso-fareast-theme-font:minor-latin;rnmso-hansi-font-family:”Century Gothic”;rnmso-hansi-theme-font:minor-latin;rnmso-bidi-font-family:”Times New Roman”;rnmso-bidi-theme-font:minor-bidi;rnmso-bidi-language:EN-US;}rn.MsoPapDefaultrn{mso-style-type:export-only;rnmargin-bottom:10.0pt;rnline-height:120%;}rn@page Section1rn{size:8.5in 11.0in;rnmargin:1.0in 1.0in 1.0in 1.0in;rnmso-header-margin:.5in;rnmso-footer-margin:.5in;rnmso-paper-source:0;}rndiv.Section1rn{page:Section1;}rn–>rnrnrnrn /* Style Definitions *n table.MsoNormalTablern{mso-style-name:”Table Normal”;rnmso-tstyle-rowband-size:0;rnmso-tstyle-colband-size:0;rnmso-style-noshow:yes;rnmso-style-priority:99;rnmso-style-qformat:yes;rnmso-style-parent:””;rnmso-padding-alt:0in 5.4pt 0in 5.4pt;rnmso-para-margin-top:0in;rnmso-para-margin-right:0in;rnmso-para-margin-bottom:10.0pt;rnmso-para-margin-left:0in;rnline-height:120%;rnmso-pagination:widow-orphan;rnfont-size:11.0pt;rnfont-family:”Century Gothic”,”sans-serif”;rnmso-ascii-font-family:”Century Gothic”;rnmso-ascii-theme-font:minor-latin;rnmso-fareast-font-family:”Times New Roman”;rnmso-fareast-theme-font:minor-fareast;rnmso-hansi-font-family:”Century Gothic”;rnmso-hansi-theme-font:minor-latin;}rnrnrn

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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