Fannie Mae issued $40.2 billion of MBS in June, up 11% in May, but far below the $130 billion it issued in the same month a year ago during a major boom in refinancings.

In its new monthly report, the GSE said its portfolio grew slightly to $817.8 billion with the addition of $19 billion in delinquent loans that it bought out of MBS pools.

The government sponsored enterprise also reported that the serious delinquency rate on its guaranteed single-family mortgages fell for the third consecutive month.

Fannie said 5.15% of its loans are 90 days or more past due in May, down 44 basis points since February. (Fannie has a one-month delay in reporting delinquency rates.)

Fannie economists recently revised downward their forecast for single-family originations after seeing disappointing home sales. Fannie now believes second quarter production (purchase money loans and refis) will total $404 billion, down from $451 billion in its June forecast.

For the full year, Fannie expects mortgage bankers to fund $1.4 trillion of residential loans with refinancings accounting for 56% of loan transactions.

In other Fannie Mae news, Lender Processing Services (LPS) of Jacksonville, Fla. said that GSE foreclosure starts are accelerating along with Home Affordable Modification Program (HAMP) cancellations, with most of the increase and volume concentrated in the six-plus month delinquent category.

In its June Mortgage Monitor report, LPS said that while delinquencies have declined slightly of late, they remain elevated at a rate of 9.55%. At the end of March residential servicers were processing monthly payments on roughly 60 million loans with 3.65% of those in some stage of foreclosure.

Jumbo and agency prime products are experiencing the greatest percentage increase in delinquencies and foreclosures since January 2008.

The report also shows that two loans are deteriorating in status for every one loan that improved.
LPS says that 775,000 loans that were current at the beginning of January are now at least 60 days delinquent or in foreclosure. The analytics firm noted that the volume of loans "curing" to a current status from most stages of delinquency has increased slightly.

The greatest percentage increase in cures over the last several months has come within the late stage of delinquency (180 days or more), and is primarily attributable to HAMP trial modifications being converted to a permanent status.

The total non-current loan rate is 13.2%. States with the most non-current loans include: Florida, Nevada, Mississippi, Georgia, and Arizona. States with the fewest non-current loans are North Dakota, South Dakota, Alaska, Wyoming, and Montana.

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