by Calculated Risk on 8/31/2018 04:56:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate decreased to 0.88% in July, down from 0.97% in June. The serious delinquency rate is down from 1.00% in July 2017.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure". 

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

This is the lowest serious delinquency for Fannie Mae since October 2007.

Click on graph for larger image

By vintage, for loans made in 2004 or earlier (3% of portfolio), 2.80% are seriously delinquent. For loans made in 2005 through 2008 (6% of portfolio), 5.01% are seriously delinquent, For recent loans, originated in 2009 through 2018 (91% of portfolio), only 0.37% are seriously delinquent. So Fannie is still working through poor performing loans from the bubble years.

The increase late last year in the delinquency rate was due to the hurricanes - there were no worries about the overall market (These are serious delinquencies, so it took three months late to be counted).

I expect the serious delinquency rate will probably decline to 0.5 to 0.7 percent or so to a cycle bottom.

Note: Freddie Mac reported earlier.