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15-Year Loans Far Outperform 30-Year at Freddie

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New business activity slid and delinquency worsened at the Federal Home Loan Mortgage Corp. The secondary lender is seeing the biggest problems on mortgages originated in 2006 and 2007 — with the level of late payments on those two vintages riding around twice as high as other vintages. But less than 2 percent of borrowers with 15-year loans — regardless of vintage — are delinquent.

Last month, purchases and issuances totaled $36.6 billion, the McLean, Va.-based company reported today. Business dropped from $44.0 billion in December but was way above $21.7 billion during January 2009.

Freddie Mac’s total mortgage portfolio finished last month at $2.2474 trillion, lower than $2.2505 trillion at the end of last year. The total portfolio consisted of $0.7437 trillion in loans owned by the secondary lender and $1.5037 trillion in outstanding participation certificates.

Home loan delinquency just kept climbing at the government-controlled enterprise, which reported a $7.8 billion fourth-quarter loss after taxes.

Residential delinquency of at least 90 days climbed to 4.03 percent in January from 3.87 percent the prior month and 1.98 percent the prior year.

Freddie is having the biggest trouble on 30-year fixed-rate mortgages originated in 2007 — with delinquency on the vintage at 7.58 percent. Given that homebuyers in 2007 purchased just after home prices peaked, this is likely the group with the highest degree of negative equity. The 2006 vintage is also performing poorly, with a delinquency rate of 6.34 percent.

Also performing poorly are adjustable-rate mortgages, with the delinquency at 17.36 percent on the 2007 vintage and 11.11 percent on the 2006 vintage.

In contrast, delinquency on 15-year fixed-rate loans is much lower — with the 2007 vintage delinquency rate at 1.68 percent and the 2006 rate at 1.78 percent.

Multifamily delinquency was unchanged from January at 0.15 percent. A year ago, late payments on apartment loans stood at just 0.03 percent.

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