DS News

45 » VISIT US ONLINE @ DSNEWS.COM BOOKS OF BUSINESS FOR FREDDIE MAC AND FANNIE MAE GROW Fannie Mae's book of business ended 10 consecutive months of declining when it posted a compound annualized rate increase of 1.5 percent in September, according to Fannie Mae's recently released September 2014 Monthly Summary. e book totaled $3.12 trillion in September, a jump of 1.5 percent from the August amount of $3.116 trillion. It was the first monthly increase in Fannie Mae's book of business this year and the first since November 2013, when it ticked up by 0.1 percent. Year-to-date as of September 30, Fannie Mae's compounded growth rate for the book of business was –1.8 percent following the 1.5 percent increase from August to September. Fannie Mae's gross mortgage portfolio declined at a compound annualized rate of 12.7 percent from August to September, down to an end balance of $438.1 billion. It has fallen at a rate of 14 percent year-to-date as of September 30; in January, it was at $480.7 billion. e value of Fannie Mae's mortgage-backed securities and other guarantees, which consists of securities and mortgage loans for which Fannie Mae manages credit risk, increased from August to September at a compounded growth rate of 2.7 percent up to $2.79 trillion. September was only the second month of 2014 that Fannie Mae's MBS and other securities increased month-over-month; it increased at a rate of 0.6 percent from June to July. Year-to-date as of September 30, it has declined at a rate of 0.6 percent. e conventional single-family serious delinquency rate for Fannie Mae loans dropped by three basis points from August to September, down to 1.96 percent. e single-family serious delinquency rate has declined every month since September 2013, when it was at 2.55 percent. Meanwhile, the multifamily serious delinquency rate held steady at 0.09 percent in September 2014, according to the summary. In September, Fannie Mae completed 8,684 loan modifications and has completed 96,915 loan mods year-to-date as of September 30. Freddie Mac's portfolio also grew in September, marking the second month of positive growth in the year's first nine months. According to the company's volume summary, Freddie Mac's total portfolio grew that month at an annualized rate of 2.2 percent, bringing the year-to-date average growth rate to -1.1 percent. e only other time the portfolio came up positive this year was in July, when it expanded at a rate of just 0.1 percent. e portfolio's ending balance was just less than $1.9 trillion. e growth accompanied a slight decline in purchases and issuances to $29.7 billion throughout the month. at was offset by drops in both sales and liquidations, resulting in a $3.5 billion increase overall. Freddie Mac reported its single-family refinance loan purchase and guarantee volume was $12 billion in September, representing 45 percent of total single-family mortgage portfolio purchases and issuances. Relief refinances made up approximately 16 percent of that volume based on unpaid principal balance (UPB). On the multifamily side, new business activity came to $2.8 billion, adding up to $14.1 billion year-to-date through September. e total reflects the UPB of Freddie Mac's multifamily new loan purchases, issuances of other guarantee commitments, and issuances of other structured securities during the month. As business picked up, delinquency improved. Freddie Mac's single-family seriously delinquent rate ticked down for another month to 1.96 percent in September, the company reported. e multifamily delinquency rate dropped to 0.03 percent, its second lowest level this year. Freddie Mac reported completing 4,782 loan modifications in September. For the year's first nine months, total loan modifications came to 52,138. MOST FED DISTRICTS REPORT 'MODEST' ECONOMIC GROWTH Modest to moderate economic growth was reported in 11 of the 12 Federal Reserve Districts in the October 2014 Current Economic Conditions Beige Book. Districts that reported moderate growth were Cleveland, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco, while districts that reported modest growth were New York, Philadelphia, Richmond, Atlanta, and Kansas City. e only Fed district that did not report modest or moderate growth was Boston, which painted a "mixed picture" of economic conditions. e overall economic growth reported in October's Beige Book was similar to what was reported the prior month. Several Fed districts reported that contacts were generally optimistic about future economic growth. Meanwhile, consumer spending growth ranged from slight to moderate in the 12 districts at a pace similar to the consumer spending growth reported in September's Beige Book. While merchandise retailers in New York reported weaker sales since September's Beige Book, October's report indicated that most retailers were relatively optimistic about sales for the rest of the year. Residential construction and real estate activity was mixed since September's Beige Book. Single-family construction was sluggish in some areas of the New York district, but multifamily construction was up. Philadelphia experienced only slight home construction growth. Single- family construction starts reached their highest level of the year in Cleveland in August, though the year-to-date numbers are slightly behind last year's pace. Both single- and multifamily construction expanded in Chicago even though that district reported lower home sales and slower growth in prices. In Atlanta, which reported multifamily construction growth in much of the district, existing home sales and prices were ahead of last year's levels. San Francisco reported stable sales of single-family homes since the September Beige Book was issued. Banking conditions have shown continued improvement since the last Beige Book, according to Fed. Consumer loan demand was mixed, however, with districts citing a reduced demand for refinancing as the reason for the mixed demand in consumer loans. Credit quality remained relatively unchanged since September's Beige Book. Overall, employment growth was about the same as it was in September's Beige Book, although most districts reported that employers were having trouble finding workers who were qualified for certain positions. Most districts reported wage growth as modest, with upward wage pressures reported for some industries and/ or occupations.

• Cover