The percentage of serious mortgage delinquencies decreased in May

on Estimated risk per 06/30/2022 16:14:00

Fanny Mae informed that the rate of serious offenses per family fell to 0.87% in May from 0.94% in April. The serious delinquency rate has decreased from 2.24% in May 2021. It’s almost back to pre-pandemic levels.

These are mortgages that are “past due or collectible on three or more monthly payments.”

Fannie Mae’s Severe NPLs peaked in February 2010 at 5.59% after the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

Fannie Freddie Has Serious Late PaymentsClick on the graph to enlarge the image

By vintagefor loans issued in 2004 or earlier (1% of the portfolio), 2.86% are seriously past due (compared to 2.98% in April).

For loans issued in 2005–2008 (1% of the portfolio), 4.67% have serious offenses (compared to 4.88%),

For recent loans issued between 2009 and 2021 (97% of the portfolio), 0.69% are seriously past due (versus 0.74%). So, Fannie is still running a few bad loans from the bubble years.

In this monthly report, delinquent mortgages are considered delinquent, but are not reported to credit bureaus.

The rise in NPLs associated with the pandemic was very different from the rise in NPLs after the housing bubble. Lending standards had been quite high during the previous decade and most of these homeowners had equity in their homes and the vast majority of these homeowners were able to restructure their loans as soon as they got a job.

Freddie Mac informed previously.