Delinquencies Plague Fannie, Freddie

Statistics show that more homeowners are falling behind on their mortgage payments as the economy tightens, and that even applies to the higher-quality, less-risky home loans owned by GSEs Fannie Mae and Freddie Mac.
""Fannie Mae"":http://www.fanniemae.com/ir/pdf/monthly/2009/022809.pdf reported last week that as of January, 2.77 percent of its single-family mortgages were seriously delinquent, defined as 90 days or more past due or in foreclosure. A month before, in December 2008, that figure was 2.42 percent. In January of last year, it was a mere 1.06 percent.
For Fannie's sibling mortgage financier, ""Freddie Mac"":http://www.freddiemac.com/investors/volsum/pdf/0209mvs.pdf, the rate of seriously delinquent loans in January stood at 1.98 percent. The company has already reported February numbers, which show a jump to 2.13 percent. In February 2008, Freddie's serious delinquencies were only 0.74 percent.
John Sim, a mortgage strategist with JPMorgan Chase told _""The Wall Street Journal"":http://www.wsjonline.com_, ""What we are seeing is that delinquency problems are catching up with prime borrowers. The overall decline in housing and unemployment is starting to affect everyone, and we are seeing the impact of it.""
The GSEs are the cornerstones of the new administration's attack on foreclosures, namely President Obama's Making Home Affordable initiative which provides refinancing and government-subsidized loan modifications to help struggling homeowners bring their mortgages current. The impact of these federal programs is not reflected in Fannie's and Freddie's most recent delinquency figures. In addition, the two GSEs have suspended foreclosure proceedings for a couple of months to allow time for the new programs to be put into place, which contributes to rising delinquencies as these loans sit unpaid for longer than 90 days.
Fannie Mae also reported last week that the company's total mortgage portfolio grew at an annualized rate of 2 percent in February to $3.1 trillion. Freddie's portfolio increased 3 percent to $2.2 trillion.