Refinancing activity is dropping rapidly in the industry and is starting to affect MBS issuance by Fannie Mae

The mortgage giant issued $52.1 billion of mortgage-backed securities in February, down 24% from the prior month. In December, Fannie issued $83.7 billion of MBS, just as the refinancing boom was beginning to peak.

Fannie and Freddie Mac's monthly volumes are heavily influenced by refinancing activity — especially now that 40% to 50% of homebuyers rely on Federal Housing Administration-backed products for financing home purchases. 

In its latest activity report, Freddie said 81% of the loans it purchased in February were refinancings. Fannie does not disclose refinancing volumes in its monthly reports.

Meanwhile, the serious delinquency rate (90 days or more past due) on Fannie guaranteed single-family loans fell to 4.45% in February, down 3 basis points from the previous month and 107 bps from a year ago. 

The serious delinquency rate on Fannie guaranteed multifamily loans is 69 bps, unchanged from a year ago.

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