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Freddie Purchases Plunge 22%, Delinquency Higher

Mortgage News

The last time that secondary business was this low at Freddie Mac was during the depths of the global financial crisis. Add to that an increase in delinquency and you have one bad month.

Purchases and issuances at the Federal Home Loan Mortgage Corp. came in at $20.7 billion during July, according to monthly operating data. Volume sank from $26.4 billion the prior month to the lowest level since October 2008 — when Freddie’s business amounted to $19.3 billion.

But business is likely to pick up in the coming months based on elevated refinance activity that has accompanied plummeting mortgage rates recently.

In fact Freddie, its government-controlled cousin Fannie Mae, and the Mortgage Bankers Association have all recently lifted their forecast for U.S. originations during the second half of this year.

In July 2010, secondary marketing activity at Freddie was $28.4 billion.

Year-to-date July 31, volume at the McLean, Va.-based company totaled $198.8 billion.

The company’s total mortgage portfolio continued liquidating, falling to $2.1207 trillion from $2.1287 trillion on June 30. At the same point last year, the balance was $2.2147 trillion.

Last month’s total portfolio consisted of an investment portfolio of $0.6830 trillion and $1.4377 trillion in outstanding participation certificates.

Residential delinquency of at least three months — which had fallen each month since November 2010’s 3.85 percent — climbed last month to 3.51 percent from 3.50 percent in June. Delinquency was better, however, than 3.89 percent during the same month in 2010.

Multifamily delinquency of at least 60 days was also higher, climbing to 0.35 percent in July from 0.31 percent a month earlier. The rate was worse than 0.23 percent in July 2010.

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