Whereas expansion for Freddie Mac’s total mortgage portfolio was rare from 2010 to 2014, the year 2015 has seen almost nothing but expansion with the exception of January, which experienced contraction at a compound annualized rate of 0.8 percent. Year-to-date through the end of October, the portfolio has expanded at an annualized rate of 1.4 percent.
In October, the portfolio expanded at an annualized rate of 0.8 percent, which calculated to an over-the-month increase of $1.2 billion up to approximately $1.932 trillion. The serious delinquency rate on single-family mortgage loans backed by Freddie Mac declined by another three basis points September to October down to 1.38 percent. The share of Freddie Mac-insured loans that are seriously delinquent is now 14 basis points below what it was in November 2008 at the start of the crisis. Single-family loans owned by Freddie Mac were seriously delinquent in October at less than half of the national rate reported by CoreLogic for September (3.4 percent).
Freddie Mac’s total mortgage portfolio has expanded only 21 times in the last 70 months dating back to January 2010 despite October’s expansion. At the beginning of the 15-month period (July 2014) that saw 14 months of expansion, the portfolio was valued at $1.895 trillion. It has expanded by about $37 billion since then.
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The number of homeowners with Freddie Mac loans who received permanent loan modifications in October (4,044) increased slightly from September’s total of 4,283. To date in 2015 through the end of October, 47,123 homeowners with Freddie Mac-insured loans have received a permanent loan modification—an average of about 4,712 per month. This average is down by nearly 900 from 2014’s monthly average of 5,596.
The aggregate unpaid principal balance (UPB) of Freddie Mac’s mortgage-related investments portfolio declined by approximately $11.6 billion in October, a substantially higher decline than September’s $2.7 billion. Meanwhile, single-family refinance loan purchase and guarantee volume totaled $12.4 billion in October, up slightly from $12.1 billion in September.
"The issuance calendar is the next step in our efforts to be clear and transparent in our credit risk transfer offerings," said Freddie Mac Vice President of Credit Risk Transfer Mike Reynolds. "The STACR program has grown from two issuances in its first year to eight this year. We expect to have eight STACR transactions in 2016, and the calendar is intended to help investors plan their allocations."
The latest STACR offering, STACR Series 2015-HQA2, is priced at $590 million and includes a reference pol of single-family mortgages with an unpaid principal balance (UPB) of more than $17 billion. The reference pool contains a subset of 30-year fixed-rate single-family mortgages acquired by Freddie Mac from December 1, 2014, to March 31, 2015. The LTVs of the mortgages in the reference pool range from 80 to 95 percent.
Through the STACR offerings and other credit risk transfer initiatives, Freddie Mac is successfully bringing back private investors into the single-family market and reducing the Enterprise’s credit risk exposure. STACR Series 2015-HQA2 is Freddie Mac’s 17th STACR transaction overall since the program began in mid-2013. With these transactions, along with two Whole Loan Security (WLS) offerings and 12 Agency Credit Insurance Structure (ACIS) transactions since that time, Freddie Mac has transferred a substantial portion of credit risk on more than $385 billion in UPB of single-family mortgages.