Freddie Mac Delinquences Continue to Climb. Retained Portfolio Contracts

by devteam March 3rd, 2010 | Share

Delinquencies among loans guaranteed by Freddie Mac continuedrnto rise in January according to the Monthly Volume Summary issued last week.  At the same time, the Enterprise's investmentrnportfolio continued to contract. 

Loans over 90 days delinquent increased to 4.03 percent ofrnall loans during January compared to 3.87 percent in December.  The delinquency rate in January 2009 was 1.98rnpercent.  The non-credit enhanced portionrnof the portfolio had a January delinquency rate of 3.13 percent compared to 3.0rnpercent in December while the credit-enhanced portion had a rate of 8.52 percentrncompared to 8.17 percent.  The percentagernof delinquencies in the multi-family portfolio was unchanged at 0.15 percent.

Loans more than 120 days delinquent represented 2.59 percentrnof Freddie Mac's total fixed rate portfolio and 13.10 percent of the company'srnadjustable rate mortgages.  The unpaidrnprincipal balances of these loans total$71.5 billion.

The value of Freddie Mac's Investment portfolio declined duringrnthe month to $743.7 billion from $755.3 billion in December, an annualized raternof 18.4 percent.  That portfolio declinedrnby 6.1 percent during 2009.  The portfoliorncomponents in January compared to (December) were as follows: PCs andrnStructured Securities, $366.92 million ($374.6 million); Non-Freddie Mac AgencyrnSecurities, $64.44 million ($66.17 million); Non-Freddie Mac Non-AgencyrnSecurities, $173.98 million ($175.67 million); Mortgage Loans, $138.36 millionrn($138.82 million).                       

The company entered into a net amount of mortgage-relatedrninvestments portfolio mortgage purchase (sale) agreements of $238.0 million inrnJanuary, down from $2.62 million in December.

Freddie Mac also announcedrntoday that it will cease purchasing and securitizing interest only mortgages effectivernon or about September 1, 2010.  This willrninclude Freddie Mac Initial InterestSM fixed-rate andrnadjustable-rate mortgages. These mortgages provide for interest-only paymentsrnfor a specified period of time beginning with the first monthly payment afterrnthe note date, and principal and interest payments on a fully amortizing basisrnfor the remainder of the mortgage term. READ MORE

On Wednesday the companyrnreleased its 4th Quarter and full-year 2009 financial report whichrnsaid it had lost $7.8 billion during the fourth quarter and 21.6 billion duringrnthe entire year, a substantial drop from the $50.1 billion it lost in 2008.

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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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