More Government Foreclosure Homes as Delinquencies Rose
November 4th, 2009 by 
jfoxx
Delinquencies on loans insured by Federal National Mortgage Association or Fannie Mae jumped last August, prompting industry analysts to expect an increase in the number of government foreclosure homes in the coming months.
Home mortgage provider, Fannie Mae said that the delinquency rates on single-family home loans it insured rose to 4.45 percent, representing a 0.28 percent point rise from the 1.57 percent rate last year.
On the other hand, the delinquency rate on multifamily home loans remained unchanged at 0.56 percent for the same month. However, it was higher compared with 0.16 percent a year earlier. Industry analysts said that delinquency rate does not reflect the actual government foreclosure homes but it could be a precursor of the trend in the housing market.
In September, the mortgage investment portfolio of Fannie Mae increased by 22.4 percent in annual rate to $792.7 billion. For year-to-date, the annual rate was 0.9 percent. Fannie Mae’s portfolio was around $761.4 billion in September last year.
The total mortgage investments of Fannie Mae rose by an annualized rate of 5.2 percent in September, hitting $3.243 trillion. For year-to-date, it rose by an annualized rate of 5.7 percent. According to Fannie Mae, it provided market liquidity totaling $67 billion for 6.9 percent annualized rate in September, hitting $2.821 trillion. The annualized year-to-date rate was 10.8 percent.
Meanwhile, a drop in the mortgage-backed securities issuance was recorded in September, from about $62.1 billion to nearly $59.2 billion. Liquidations also dropped to around $44.6 billion. Similarly, another home mortgage agency, Federal Home Loan Mortgage Corp. of Freddie Mac reported an increase in delinquencies on its guaranteed loans. The agency’s mortgage investment portfolio also rose by 7.3 percent annualized rate in September.
The growing delinquencies are putting strain on the finances of both Fannie Mae and Freddie Mac. On its part, Freddie Mac reported delinquency acceleration of 3.33 percent from 3.13 percentage point in August and September last year’s 1.22 percent.
The company’s multifamily delinquency rate rose slightly by 0.11 percent while the volume of its refinance loan purchase dropped by 21.4 billion from $35.6 billion.
Industry expert said that delinquency rates does not reflect the actual government foreclosure homes numbers because some distressed homeowners may find ways to save their properties from foreclosures.
