Managing Delinquencies
Three years into the crisis, the mortgage industry continues to face very high delinquency rates. At the end of 2011, about eight percent of all first mortgages in the United States were seriously delinquent (90+ days past due or in foreclosure).
Freddie Mac holds among the smallest percentage of these problem loans, with just 3.5 percent of our loans being seriously delinquent. While we're not satisfied with this, it is well below the industry average. This is because Freddie Mac is an established industry leader in identifying and addressing any problems with loans before they become foreclosures. Since the housing crisis began, we have helped more than 656,000 homeowners avoid foreclosure.
Moreover, Freddie Mac has primarily operated in the conventional, conforming mortgage market, buying 30- and 15-year fixed-rate mortgages. While delinquencies are up across the board, the delinquency rate for subprime mortgages is nearly five times higher than for prime, conventional fixed-rate mortgages.
Mortgage Landscape
Industry-wide, there were 4 million seriously delinquent mortgages in the U.S. at the end of December 2011. Freddie Mac holds only 10 percent of these delinquent mortgages. So while we own approximately a quarter of all outstanding first-lien home loans, we hold a disproportionately small percentage of seriously delinquent mortgages.
Sources: FDIC, Freddie Mac, Fannie Mae, Mortgage Bankers Association, HUD, CoreLogic, Federal Reserve. Note: Data as of December 31, 2011. Seriously Delinquent loans were at least 90 days delinquent or in foreclosure. Components may not sum to 100% because of rounding. Freddie Mac and Fannie Mae figures include whole loans held in portfolio and in guaranteed securities outstanding.
*MBA data as of December 31, 2011