The delinquency rates at Fannie Mae and Freddie Mac, the GSEs that control more than half of the country’s mortgages, moved in opposite directions in September, with Fannie’s rate declining and Freddie’s increasing, according to a post by Calculated Risk’s Bill McBride.
Fannie’s rate fell to 4 percent, a 0.3 percent decline from September and a 0.56 percent decline from September in 2010. The rate peaked in February 2010 at 5.59 percent. For Freddie, the rate increased marginally to 3.51 percent from 3.49 percent. Even with the increase, the rate is 0.29 percent lower than September 2010, and 0.69 percent down from the rate’s peak in February 2010.
“Some of the rapid increase in 2009 was probably because of foreclosure moratoriums, and also because loans in trial mods were considered delinquent until the modifications were made permanent,” McBride wrote, elaborating on a graph charting the rise in delinquencies.
A delinquent mortgage is either three monthly payments or more past due or in foreclosure.
In his post, McBride also wrote that though ostensibly boring, there are important implications in the delinquency data.
“Tracking this on a monthly basis this is kind of like watching paint dry, but the serious delinquency rates are generally falling – but only falling slowly,” McBride wrote. “The key is the normal serious delinquency rate is under 1%, and at this pace of decline, the delinquency rate will not be back to ‘normal’ for a number of years.”