As Freddie Mac faced a financial collapse, its business purchases dropped to the lowest level in more than seven years, its total mortgage portfolio declined and delinquency continued to accelerate. One bright spot was a decline in multifamily delinquency.
Purchases and issuances were $25.8 billion during August, according to a monthly summary released today. Volume sank from $34.6 billion in July and $45.0 billion a year earlier.
The last time business was this bad was February 2001, when the McLean, Va.-based firm had new business purchases of $24.2 billion. The steep decline in August reflected the company’s struggle to conserve cash as it became increasingly difficult to raise capital.
So far this year, purchases and issuances total $356.8 billion.
Freddie’s total mortgage portfolio ended last month at $2.192 trillion, falling from $2.209 trillion the prior month. The last time the secondary lender saw its mortgage portfolio decline was in April 2004.
The latest total mortgage portfolio balance included a retained portfolio of $0.761 trillion and outstanding participation certificates of $1.431 trillion.
Residential delinquency of at least 90 days was 1.11 percent at the end of August, climbing from 1.01 percent on July 31 and 0.46 percent a year earlier. Delinquency stands at the highest level since at least February 2001 — the oldest data available at MortgageDaily.com.
Multifamily delinquency of at least 90 days was just 0.02 percent on Aug. 31, lower than 0.03 percent a month earlier and 0.05 percent in August 2007.
The government sponsored enterprise reported that its average duration gap remained at zero months, though its regulator, Federal Housing Finance Agency Director James B. Lockhart III, testified before Congress this week that Freddie had been relying on short-term discount notes to finance 30-year mortgages as it faced a government takeover. What few debt securities that were issued had maturities of no more than three years.
