Fannie, Freddie: Seriously Delinquent?

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The news was full of stories this weekend about the latest bad news from Fannie Mae.

The percentage of borrowers who are seriously delinquent - more than 90 days late in their loans payments - continues to rise in Fannie Mae's loan portfolios. More of Fannie's borrowers are on the road the foreclosure than ever before.

But don't get out the torches and pitchforks yet... Fannie Mae is actually doing much better than the mortgage business overall
.

Fannie's serious delinquency rate for conventional, single-family home loans rose to 5.52 percent in January, up from 5.38 percent in December, according to Fannie Mae. Freddie Mac, which conducts a very similar business to Fannie of providing money for mortgages made by banks, isn't far behind with a serious delinquency rate of 4.03 percent, according to coverage in HousingWire.

Fannie Mae and Freddie Mac's loans are still performing much better than the mortgage business overall, according to the National Delinquency Survey from the Mortgage Bankers Association's (MBA). The survey counts delinquent loans from all of MBA's members, including most banks or other mortgage companies. The percentage of seriously delinquent home loans overall grew to 7.01 percent for prime loans in the fourth quarter of 2009, up from 6.26 percent in the third quarter.

Even that high rate seems low compared to the trouble with subprime loans. Serious delinquencies for subprime mortgages hit a whopping 31 percent, up from 29 percent in the third quarter, according to MBA.


The real trouble with Fannie and Freddie was never with their portfolio of home loans... their problems came from buying bad bonds with borrowed cash, something they can't do anymore, now that Fannie and Freddie were seized by the federal government in 2008. But that's another story...
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