Friday, August 08, 2014

Lawler: Fannie, Freddie in Q2

by Calculated Risk on 8/08/2014 02:56:00 PM

From housing economist Tom Lawler:

Yesterday Fannie Mae and Freddie Mac both released their quarterly financial results for the second quarter of 2014. On the earnings front Fannie reported that both GAAP net income and comprehensive income last quarter were $3.7 billion, meaning that Fannie expects to pay Treasury $3.7 billion in dividends in September. That payment would bring total dividends paid to Treasury of $130.5 billion, compared to $116.1 billion in cumulative cash draws from Treasury since 2008. Freddie Mac reported GAAP net income of $1.4 billion and comprehensive income of $1.9 billion, meaning that Freddie expects to pay Treasury $1.9 billion in dividends in September. That payment would bring total dividends paid to Treasury of $88.2 billion, compared to $71.3 billion of cumulative cash draws from Treasury since 2008.

Here are some summary delinquency rate stats for the conventional SF mortgage books of both companies.

Payment Status, Fannie Conventional SF Mortgage Book
  6/30/20143/31/20146/30/2013
30 to 59 days delinquent1.46%1.40%1.85%
60 to 89 days delinquent0.42%0.40%0.51%
seriously delinquent2.05%2.19%2.77%

Payment Status, Freddie Conventional SF Mortgage Book
  6/30/20143/31/20146/30/2013
One month past due1.53%1.40%1.80%
Two month's past due0.48%0.47%0.55%
Seriously delinquent2.05%2.20%2.79%

Here are some summary stats for SF REO activity at both companies.

  Freddie SF REO ActivityFannie SF REO Activity
  AcquisitionsDispositionsInventory AcquisitionsDispositionsInventory
Q4/1023,771 26,589 72,079 45,96250,260 162,489
Q1/1124,707 31,627 65,159 53,54962,814 153,224
Q2/1124,788 29,348 60,599 53,69771,202 135,719
Q3/1124,378 25,381 59,596 45,19458,297 122,616
Q4/1124,758 23,819 60,535 47,25651,344 118,528
Q1/1223,805 25,033 59,307 47,70052,071 114,157
Q2/1220,033 26,069 53,271 43,78348,674 109,266
Q3/1220,302 22,660 50,913 41,88443,925 107,225
Q4/1218,672 20,514 49,071 41,11242,671 105,666
Q1/1317,881 18,984 47,968 38,71742,934 101,449
Q2/1316,418 19,763 44,623 36,10640,635 96,920
Q3/1319,441 16,945 47,119 37,35333,332 100,941
Q4/1316,941 16,753 47,307 32,20829,920 103,229
Q1/1414,384 18,126 43,565 31,89632,727 102,398
Q2/1410,592 18,023 36,134 31,67837,280 96,796

Fannie Mae reported that for foreclosures completed in the first six months of 2014, the average number of days from the borrowers’ last paid installment on their mortgage to when the related properties were added to Fannie’s REO inventory was 918 – or slightly over 2 ½ years. Average days to foreclosure were especially long in New York (1,371), Florida (1,332), and New Jersey (1,307).

Freddie Mac reported that for foreclosures completed in the first six months of 2014, the average number of days from the borrowers’ last scheduled payment to when the related properties were added to Freddie’s REO inventory was 875 days. Average days to foreclosure ranged from 403 in Missouri to 1,337 in New Jersey.

Fannie Mae’s average charged guaranty fee on SF mortgages acquisitions last quarter was 62.6 bp, little changed from 63.0 bp in the previous quarter but up considerably from 25.7 bp average in 2010. Pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011 (the “TCCA”), on April 1, 2012 Fannie increased Gfees by 10 bp, and the incremental revenue from this 10 bp is remitted to Treasury.

Freddie Mac’s average charged guaranty fee on SF mortgage acquisitions last quarter was 58 bp, up from 56 bp in the previous quarter and well above the 25 bp average in 2010. Pursuant to the TCCA, on April 1, 2012 Freddie increased Gfees by 10 bp, and the incremental revenue from this 10 bp is remitted to Treasury.

Fannie Mae’s “national” home price index, a unit-weighted repeat sales index based on purchase transactions in Fannie-Freddie acquisitions and public deed data, increased by 5.9% from the second quarter of 2013 to the second quarter of 2014. In 2013 this HPI increased by 8.3% (Q4/Q4).

Freddie Mac’s “national” home price index, a value-weighted repeat transactions index (using weights based on each state’s share of Freddie’s SF book) based on repeat transactions on residential properties acquired by Freddie or Fannie (purchase transactions and some refinance transactions), increased by 6.1% from June 2013 to June 2014. In 2013 this HPI increased by 9.3%.