In Fannie Mae‘s July 2014 Monthly Summary released on August 29, the GSE reported that July’s serious delinquency rate of 2.0 percent for single-family properties is at its lowest level since October 2008.
The percentage of single-family properties that were in serious delinquency, which is defined as having a mortgage loan where the payment is more than three months overdue or the property is in foreclosure, experienced a month-over-month decline from 2.05 percent from June and a drop from 2.7 percent from July 2013. July’s percentage of 2.0 is way down from Fannie Mae’s serious delinquency rate peak of 5.59 percent, reached in February 2010.
Earlier in the week, GSE Freddie Mac reported a similar decline in serious delinquency for July. Freddie Mac’s serious delinquency rate of 2.02 percent for July 2014 was down from its rate of 2.07 percent in June and from 2.7 percent from a year ago. Freddie Mac’s highest serious delinquency rate of 4.2 percent was also reached in February 2010.
Analysts expect the serious delinquency rate for both GSEs will fall below 2 percent in August. With Fannie Mae’s serious delinquency rate having declined by 0.7 percentage points since July 2013, analysts expect that at its current pace of decline, it will drop to below what is referred to as the “normal” rate of 1 percent by 2016.
Also in the latest report, Fannie Mae reported that it completed 10,812 loan modifications in July 2014 and has completed 78,866 loan modifications year-to-date as of July 31, 2014.
Both Fannie Mae and Freddie Mac have been under conservatorship of the Federal Housing Finance Agency since September 2008.