by Calculated Risk on 1/10/2019 01:02:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 0.76% in November, from 0.79% in October. The serious delinquency rate is down from 1.12% in November 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 rate for Fannie Mae since August 2007.

Freddie Mac reported that the Single-Family serious delinquency rate in November was 0.70%, down from 0.71% in October. Freddie's rate is down from 0.95% in November 2017.

Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

This is the lowest serious delinquency rate for Freddie Mac since December 2007.

Click on graph for larger image

For Fannie, by vintage, for loans made in 2004 or earlier (3% of portfolio), 2.62% are seriously delinquent. For loans made in 2005 through 2008 (5% of portfolio), 4.50% are seriously delinquent, For recent loans, originated in 2009 through 2018 (92% of portfolio), only 0.33% 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.

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