Fannie Mae: Delinquencies Increase Sharply in October

[girl gone mad]

Good thing we gave them a blank check.

via http://www.calculatedriskblog.com/2009/12/fannie-mae-delinquencies-increase.html">Calculated Risk:

Fannie Mae: Delinquencies Increase Sharply in October

Fannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 4.98% in October, up from 4.72% in September - and up from 1.89% in October 2008.

"Includes seriously delinquent conventional single-family loans as a percent of the total number of conventional single-family loans. These rates are based on conventional single-family mortgage loans and exclude reverse mortgages and non-Fannie Mae mortgage securities held in our portfolio.
...
A measure of credit performance and indicator of future defaults for the single-family ... credit books. We include single-family loans that are three months or more past due or in the foreclosure process ... We include conventional single-family loans that we own and that back Fannie Mae MBS in our single-family delinquency rate, including those with substantial credit enhancement."

Just more evidence of the growing delinquency problem, although it is important to note these stats do include Home Affordable Modification Program (HAMP) loans in trial modifications (and the trial modification periods have been extended again).

:scared:

[Skink]

1. who here has been able to pay the fees that are assessed after 90 days?

[C_Lawyer09]

2. Another reason to assess the validity of govt. subsidized programs

I'm all for a govt. role in regulation, but it needs to be recognized that govt. support of various programs is part of what landed us in our current state.

[girl gone mad]

3. See also: Fannie, Freddie, Heading to Zero

A good potential short for those with the inclination, money and nerves?

http://www.ritholtz.com/blog/2009/12/fannie-freddie-heading-to-zero/

What did it mean to investors when Freddie & Fannie shares jumped (27% and 21%) and their trading volume for both was the highest since late October?

Not much. The most recent political news is that the White House has granted the former GSEs a blank check — no cap on aid. (Hence, why they are now former GSEs). That was the cause of their share price rally. But what does this mean for the companie’s future?

Nothing good. It signals that Uncle Sam will likely use the firms — the government owns 80% of both — to intervene further in the housing market.

(snip)

One other factor Petruno notes: “The pay packages the Treasury announced Thursday for the companies’ chief executives consisted exclusively of cash compensation; no shares were offered.”

Likely outcomes? The two firms actual value falls to zero . . .