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Delinquencies Rising at Fannie & Freddie
Posted By Barry Ritholtz On April 22, 2009 @ 6:45 am In Credit,Legal,Real Estate | Comments Disabled
No surprise here: Even amongst the most credit worthy borrowers — aka “Prime” — defaults are rising rapidly. Job losses, debt problems, loss of income are the primary causes.
Prime borrowers at least 60 days behind on mortgages — “Delinquent” is the official term for this period — rose from 497,131 in December to 743,686 in January, according to the Federal Housing Finance Agency. This is almost double the total for October.
The 3 step process is delinquency (60 days late), default (determined by the terms of the mortgage itself — but usually 90 or 120 days behind), leading to foreclosure.
“Fannie Mae and Freddie Mac mortgage delinquencies among the most creditworthy homeowners rose 50 percent in a month as borrowers said drops in income or too much debt caused them to fall behind, according to data from federal regulators . . .
Of all borrowers who ended up in default, 34 percent told Fannie and Freddie they were earning less money, about 20 percent cited excessive debt as a reason for missing mortgage payments, and 8.1 percent blamed unemployment, FHFA said.”
Note once again these are not Sub-prime or alt-A — they are Prime, the highest quality borrowers possible.
Chart via Field Check Group 
Fannie, Freddie Defaults Rise as Borrowers Cite Lower Income 
Bloomberg, April 21 2009
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2009/04/delinquencies-rising-at-fannie-freddie/
URLs in this post:
 Field Check Group: http://www.fieldcheckgroup.com/blog/
 Fannie, Freddie Defaults Rise as Borrowers Cite Lower Income: http://www.bloomberg.com/apps/news?pid=20601087&sid=aw4.u4ryoAq0&
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