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32 DELINQUENCIES KEEP DESCENDING FOR FANNIE AND FREDDIE Serious delinquency rates are down for both Fannie Mae and Freddie Mac, according to the two enterprises' most recent summary reports. In June, Fannie's serious delinquency rate dropped three basis points—down to 1.01 percent—while Freddie's rate fell to 0.85 percent—its lowest point since 2008. Overall, Fannie Mae's book of business has increased 2.9 percent over the year. Its mortgage portfolio balance ticked up nearly $10 million, clocking in at $316 billion by the end of June. e GSE completed 7,587 loan modifications for the month. Freddie's guarantee portfolio experienced solid growth as well, rising 6 percent for the year, while its total investments portfolio and mortgage-related investments portfolio dropped, declining 11 percent and 12 percent from June 2016, respectively. Of its total guarantee portfolio, 75 percent is comprised of mortgage loans, marking an increased share of 6 percentage points from one year prior. Purchase volume is down, however, dropping 20 percent in the last 12 months due to declining refinance activity. Donald H. Layton, CEO of Freddie Mac, said he is proud of the work his team is doing— and the success Freddie has had in improving the nation's housing finance system. "Our continued very solid financial results and strong business fundamentals reflect the company's transformation into a well-run commercial enterprise," Layton said. "is transformation is enabling us to better deliver on the mission that is our purpose: to provide liquidity, stability, and affordability to the American primary mortgage market. We're doing that by helping lenders of all sizes compete which, in turn, expands affordable housing opportunities for borrowers and renters nationwide." Freddie's recent focus on transferring credit risk has also helped the enterprise better serve American homebuyers, Layton said. "rough our award-winning credit risk transfer programs, we're fulfilling our mission with much less risk to taxpayers than in the past," he said. e GSE has transferred risk on $105 billion in loans to date, accounting for about 33 percent of its total outstanding single-family guarantee portfolio—a seven-percentage-point jump from June 2016. STUDY: PROGRESS ASIDE, MORTGAGE SECTOR STILL HAS IMAGE ISSUES e housing crisis impacted the reputation of the mortgage servicing industry in the eyes of the public. But as the years went by, the industry had slowly rehabilitated its image. Despite the hard-won gains, however, the J.D. Power 2017 U.S. Primary Mortgage Servicer Satisfaction Study, released in July, this year customers have significant declines in their overall satisfaction and brand perceptions of mortgage servicers. is downturn was driven primarily by a growing number of customers who perceive their mortgage servicer to be focused more on profit than on their customers. J.D. Power noted this could have long-term effects on future business. "e past few years have not been easy for mortgage servicers as they've struggled with regulatory and market pressures but still managed to deliver on customer satisfaction. Now, as that trend starts to shift and customer satisfaction levels off, it is critical that mortgage servicers continue to balance the demands of this tough marketplace with the needs of their customers," Craig Martin, Senior Director of Mortgage Practice at J.D. Power, said. To measure customer satisfaction with their mortgage servicing experience, the study focused on six areas: new customer orientation, billing and payment process, escrow account administration, interaction, mortgage fees, and communications. Satisfaction was calculated on a 1,000-point scale. Despite the decrease in satisfaction, some companies remained steadfast. Quicken Loans was on top for the fourth straight year, scoring 840. It was followed by Regions Mortgage and Huntington National Bank, which scored 819 and 795, respectively. e study found significant improvement year-over-year by Bank of America, Nationstar Mortgage, and Ditech Financial. ose firms showed increases of 26, 29, and 37 points, respectively. For servicers needing some extra advice when it comes to building the right customer- client relationship, the study identifies key steps, such as improving client onboarding and digital offerings, cutting down on time it takes to interact with servicers, and focusing on mobile usage, that will increase satisfaction and brand image. According to 2017 U.S. Census Bureau data, the average homeowner's net worth is 36 times that of the average renter. KNOW THIS

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