Most Viewed Posts

Thanks for stopping by my Mortgage Statistics Blog...

If you're wondering what my top blog posts have been, here they are:

1. 19 Years of Mortgage Origination Data
2. A Century of Home Ownership Rates
3. Option Arm Resets 2009, 2010, 2011 and 2012
4. Wells Fargo Mortgage Delinquency Rates
5. Will the Mortgage Interest Deduction go away?
6. and Fannie Mae Delinquency Data

What else would you like to see?

Unemployment Rate versus Mortgage Delinquency Rate

The chart can be expanded by clicking on it. But one interesting thing to look at is comparing the delinquency rate on all Freddie Mac and Fannie Mae Mortgages (The bar charts -- which use the left axis) versus the unemployment rate during the last 5 years. It's not surprising that as people lose their jobs and/or become under-employed they have less ability to stay current on their monthly mortgage payments.

consequently, the seriously delinquency rate experienced by America's largest mortgage companies really spikes up. You can see that Fannie has experienced far more mortgages going bad than Freddie has---but neither one did good in 2010. Fortunately, things seemed to have plateaued for now---However, as the chart shows---if people start getting laid off again, I think another step up in charge-offs and non-performing loans could pester these GSA's.

(Unfortunately, it had been months since I pulled the unemployment data, and I couldn't readily find the monthly U-6 data for much of 2009 and 2010---If you happen to have it handy, feel free to leave it in the comments and hopefully I'll be able to update the chart in a future month).

Fannie Mae - Delinquent Mortgage Chart and Data - Things improved in 2010.

Click on Chart for a larger image.

Fannie Mae publishes seriously delinquent data each and every month for mortgages that it owns. The good news is that the delinquency rate has started to come down during 2010; the bad news is that it is still elevated versus historic norms.

Fannie Mae saw it's highest delinquency rates during February 2010, when 3.9% of single-family homes (non-credit enhanced / i.e. conforming mortgages) were seriously behind their monthly payment. Things were even worse for Fannie's credit enhanced notes (i.e. lower down-payment levels and likely paying mortgage insurance)---A whopping 13.8% of credit enhanced mortgages were deliquent in February, 2010.

Since that time, things improved to 3.4% andd 10.6% by the end of 2010.

Although things have improved, Fannie is still in a little worse shape than Freddie (That will be the topic of another post).

Jobless Rate Doubles; Fannie & Freddie Delinquencies Septuple

Click on Chart for a Bigger Image

Here is an update of a set of data that I've been paying attention to for the last year. It compares the unemployment rate (Blue Line), the U6 Broader Unemployment Rate (Purple Line, which includes the jobless, and the people working part-time for economic reasons) with the delinquency rate on Fannie Mae (Red Bar) and Freddie Mac (Green Bar) mortgage loans on single family homes.

The picture isn't pleasing---You can see that as broad unemployment rate increased from less than 10% to 17.5% (in October, 2009)---The delinquency rate on home loans for Fannie & Freddie (which are typically Prime Loans) have increased by almost 6 - 8 Fold!

Let me repeat that---In Late 2006 and Early 2007, the prime mortgages were delinquent at merely ~0.5%. Now Freddie Mac has a 3.33% Delinquency Rate (September, 2009) and Fannie has a Delinquency Rate of 4.45%.

People should remember that in 2007, the economy & markets started tanking because sub-prime mortgages started going delinquent... Granted, those loans were going bust a significantly higher rate than the Freddie & Fannie notes---but also remember that Freddie & Fannie loan out significantly more money than what was ever given out to sub-prime borrowers... I don't have the data, but I'd venture to say that in order-of-magnitude--these loan delinquencies could be as bad or worse than the sub-prime crises.

Fannie & Freddie's Serious Delinquencies Continue to Worsen

Click on Image for a bigger chart

Data released from Freddie and Fannie show that the rate of serious delinquencies continue to worsen in March (Freddie) and February (Fannie).

Freddie saw a 2.29% serious delinquency rate in its single family home mortgage portfolio, while Fannie Mae saw almost 3% of it's single family home loan portfolio in the seriously delinquent category. [both of these data points are shown as bars & use the left hand scale on the chart].

Fannie and Freddie have large amounts of prime mortgages on their books and as you can see, as the unemployment rate and underemployment rate in the US continue to increase (Lines on the chart using the right hand scale), the numbers of people with prime mortgages who fall behind and run into payment problems continue to increase.

Since we can see that the unemployment continued to rise in April, 2009 I think we can safely forecast that the GSE's delinquency rate will continue to climb upwards.

Fannie & Freddie Delinquency Rates vs Unemployment Rate

Click for a Larger Image

It has been a couple of months since I've compared the serious delinquency rates at Fannie Mae and Freddy Mac with the unemployment rate and (U6) underemployment rate provided from the Bureau of Labor Statistics.

The news doesn't appear to be getting any better---The Fannie Mae delinquency rates on single family homes have incrased from 2.13% in November, 2008 to 2.77% in January, 2009 (The latest data-point available)---The delinquency rate at Freddie Mac has increased from 1.72% in December, 2008 to 2.13% in February 2009.

Given that the March Unemployment Rate is 8.5% and the U6 unemployment rate (which includes underemployed workers is 15.6%)---I estimate that you'll see Freddie's delinquency rates for March 2009 come in over 2.5% and Fannie's to be north of 3%... Keep in mind most of these mortgages were of significantly higher quality than your run of the mill sub-prime loan, Alt-A loan or Option Arm Loan---Those delinquency rates are significantly higher.

Unemployment/Underemployment Rates vs Freddie Mac and Fannie Mae Mortgage Delinquency Rates

Given Barack Obama's Stimulus Package and efforts to curtail the amount of mortgage foreclosures that are occurring in the market place, I thought it would be an interesting exercise to compare the unemployment rate and underemployment (U6) rate in America with the mortgage delinquency rates that Freddie Mac and Fannie Mae are experiencing.

Looking at data for 2006 - 2008, you can see the impact of a vicious feedback cycle. As people get delinquent in their mortgages, banks and other investors have to write assets down and constrict credit, this feeds into the economic contraction which causes more companies to scale back on headcount and hours worked--causing increases in the unemployment rate and underemployment rate.


Click for a Larger Image

In my opinion, as you look out into 2009 (and 2010) the economic contraction and credit crunch will continue to cost people their jobs--and this will cause an escalation in delinquent loans throughout 2009 and part of 2010---It will hit conforming loans, Alt-A loans, sub-prime and jumbo mortgages.

Expect Helicopter Ben to try and solve much of the problem by printing more money and trying to push long term rates near all-time lows.
________________________________________________
For more information on underemployment click here: unempmloymentadvice.blogspot.com

Freddie Mac vs Fannie Mae Mortgage Delinquency Rate 2005 - 2008

In a couple of recent posts I showed how from 2005 to 2008 Fannie Mae's Delinquency rate on single family mortgages has more than tripled and during the same time Freddie Mac's delinquency rates on single family mortgages have more than doubled---so I thought it would be useful to put all that data on a single chart.

Below you will see delinquency statistics for Freddie Mac (Green Lines) and Fannie Mae (Red Lines) from 2005 to 2008. Throughout 2005 and much of 2006, the difference in delinquency rates between the two firms was ~10 basis points. However, by the end of 2008 Fannie Mae was seeing significantly higher delinquency rates than Freddie Mac.

In November 2008, Fannie had delinquency rate that was 61 bps higher than Freddie for "Total Single Family" mortgages---And 228 bps worse for Fannie when you are only looking at single family mortgages with credit enhancements (i.e. Private Mortgage Insurance)


Click for a larger image

Fannie Mae's Mortgage Delinquency Rate more than triples from 2005 to 2008

According to data & statistics from Fannie Mae the amount of mortgage delinquencies on single family home mortgages have more than tripled from early 2005 (0.64% in 2/2005) to the end of 2008 (2.13% seriously delinquent in 11/2008).

The chart below looks at conventional single-family mortgages that are three months ore more past-due or in foreclosure as a percent of the total number of conventional single family mortgages.


Click for a Larger Image

The figures for Credit Enhanced Fannie Mae mortgages is worse than average with a serious delinquency rate of 5.69% in November 2008 (and rising). (These are loans with Private Mortgage Insurance (PMI) or some other type of credit enhancement).

Fannie Mae's Delinquency Rate Continues to Climb

According to Forbes, Fannie Mae saw its delinquency rates climb from 1.72% in in September 2008 to 1.89% in October 2008.