Freddie Mac Delinquency Rate Hits Record High

September 28, 2009 No Comments »


The delinquency rate on single-family homes hit a record high 3.13 percent last month at mortgage financier Freddie Mac.

That’s up from 2.95 percent in July and roughly 200 percent higher than the 1.11 percent delinquency rate seen in August 2008, shortly before the company was placed into government conservatorship.

The delinquency rate is based on loans that are at least 90 days past due or somewhere in the foreclosure process.

The sharp increase in late mortgage payments is probably related to the reduced documentation loans that festered during the boom years, coupled with recent job losses and home price depreciation.

Late last year, there was a report that claimed Fannie Mae and Freddie Mac chief risk officers ignored warnings to stay relevant in the mortgage market by offering products like stated income loans.

Freddie said it purchased $35.6 billion in refinance loans during August, up from $34.1 billion in July.

The total mortgage portfolio increased at an annualized rate of 3.7 percent to $2.24 trillion, while the aggregate unpaid principal balance (UPB) of its mortgage-related investments portfolio decreased to $779.4 billion as of August 31.

Shares of Freddie Mac, which many analysts believe are worthless, are trading at nearly $2 per share, despite plummeting as low as 35 cents shortly after the government takeover.

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