Fannie Mae’s book of business increased at a compound annualized rate of 0.3 percent in May, according to the mortgage giant’s May 2013 monthly summary (full report embedded below).
Fannie Mae’s total book of business stood at $3.178 trillion for May 2013 as against $3.190 trillion for May 2012. The total book of business is the aggregate of gross mortgage portfolio balance and total Fannie Mae MBS and other guarantee balances, subtracted by Fannie Mae MBS held in the mortgage portfolio.
Fannie Mae’s May 2013 summary report throws information on the mortgage giant’s monthly and year-to-date activities for its gross mortgage portfolio, mortgage-backed securities and other guarantees, interest rate risk measures, serious delinquency rates, and loan modifications.
Drastic Decline In Gross Mortgage Portfolio
Fannie Mae’s gross mortgage portfolio declined sharply at a compound annualized rate of 23.7 percent in May. However, the end balance of gross mortgage portfolio for the first five months of the current calendar stood at $574.852 billion as against the full year size of $633.054 billion posted for last year.
As of May 31, 2013, its gross mortgage portfolio end balance, after taking into account net outstanding commitments to sell of $22.8 billion, was $552.0 billion.
The end balance denotes the unpaid principal balance of the mortgage portfolio that Fannie Mae holds for investment and liquidity purposes.
Fannie Mae also known as Federal National Mortgage Association (OTCBB:FNMA)’s cumulative net retained portfolio commitments for the whole of current year stood at $6.552 billion as against $38.437 recorded for the entire 2012.
The mortgage giant’s portfolio commitments represent mandatory commitments entered into during the month. It enters into forward commitments to purchase mortgage securities and mortgage loans, or to sell mortgage securities, for the mortgage portfolio. Fannie Mae’s purchase commitments typically require mandatory delivery and are subject to the payment of pair-off fees for non-delivery.
Drop In Conventional Single-Family Serious Delinquency Rates
Federal National Mortgage Association (OTCBB:FNMA)’s conventional single-family serious delinquency rates fell ten basis points to 2.83 percent in May 2013. This number is arrived at as a percent of seriously delinquent conventional single-family loans to the total number of conventional single-family loans. This excludes reverse mortgage and non-Fannie Mae mortgage securities held in the mortgage giant’s portfolio.
The multi-family serious delinquency rate fell six basis points to 0.30 percent in May as against 0.36 percent in April 2013.
While highlighting interest rate risk disclosures, Fannie Mae’s May 2013 monthly summary reveals the effective duration gap on its portfolio averaged zero months in May.
The mortgage giant has completed 13,650 loan modifications in May, for a total of 70,544 loan modifications in the five months ended May 2013.
The government put the mortgage giants Freddie Mac and Fannie Mae into conservatorship almost five years ago.
Recently, Federal National Mortgage Association (OTCBB:FNMA) recorded a net income of $4.6 billion and said it will pay the Treasury a $7 billion dividend for the quarter.
Shares of the mortgage giants Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) were de-listed from the NYSE in 2010. Until recently, these shares have been traded for pennies. However, they are now up 607 percent and 523 percent in the past six months in over-the-counter transactions.
Last month, a bipartisan group of senators created legislation intended to strengthen the housing finance system of the United States by replacing government sponsored enterprises (GSEs) Fannie Mae/ Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac/ Federal Home Loan Mortgage Corp (OTCBB:FMCC) with a privately capitalized system.