Fannie Mae’s Gross Mortgage Portfolio Sees More Substantial Contraction

fanniemaeFannie Mae’s gross mortgage portfolio contracted at a compound annualized rate of 21.3 percent in September, marking the sixth consecutive month of contraction and the seventh in nine months in 2015, according to Fannie Mae’s September 2015 Monthly Volume Summary released Wednesday.

Over the month, the value of the gross mortgage portfolio declined by more than $7.5 billion, from $377.9 billion in August down to $370.4 billion in September. The 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 minimum 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 13.6 percent for the first nine months of 2015.

The gross mortgage portfolio has seen expansion in only four months out of the last 63 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 0.9 percent in September, only the third time in nine months this year it has done so. The Book of Business has contracted at an average compound annualized rate of 0.9 percent for the first nine months of 2015. At the end of September, the Book of Business was valued at $3.103 trillion at the end of September after the expansion. The total value of Fannie Mae’s mortgage-backed securities and other guarantees for September was $2.818 trillion, an increase from August’s total of $2.811 trillion.

The serious delinquency rate on single-family mortgage loans backed by Fannie Mae is still well below its pre-crisis levels after declining by three basis points in September  down to 1.59 percent. The serious delinquency rate on Fannie Mae-backed single-family mortgage loans has declined every quarter since Q1 2010. At 1.59 percent, it is less than half of the national average of 3.5 percent reported by CoreLogic for August.

The number of loan modifications completed by Fannie Mae was down slightly, from 7,245 in August down to 7,064 in September. Year-to-date as of the end of September, Fannie Mae has completed 75,113 loan mods, an average of 8,345 per month. Fannie Mae completed an average of 10,235 loan mods per month for the full year of 2014.

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