HOUSING FINANCE POLICY CENTER HOUSING FINANCE AT A GLANCE A MONTHLY CHARTBOOK

Transcription

1 HOUSING FINANCE POLICY CENTER HOUSING FINANCE AT A GLANCE A MONTHLY CHARTBOOK February 218 1

2 ABOUT THE CHARTBOOK The Housing Finance Policy Center s (HFPC) mission is to produce analyses and ideas that promote sound public policy, efficient markets, and access to economic opportunity in the area of housing finance. At A Glance, a monthly chartbook and data source for policymakers, academics, journalists, and others interested in the government s role in mortgage markets, is at the heart of this mission. We welcome feedback from our readers on how we can make At A Glance a more useful publication. Please any comments or questions to ataglance@urban.org. To receive regular updates from the Housing Finance Policy Center, please visit here to sign up for our bi-weekly newsletter. HOUSING FINANCE POLICY CENTER STAFF Laurie Goodman Center Co-Director Alanna McCargo Center Co-Director Edward Golding Senior Fellow Jim Parrott Senior Fellow Sheryl Pardo Associate Director of Communications Todd Hill Policy & Research Program Manager Jun Zhu Senior Research Associate Bing Bai Research Associate Karan Kaul Research Associate Jung Choi Research Associate Bhargavi Ganesh Research Analyst Sarah Strochak Research Assistant Andrea Reyes Center Administrator

3 CONTENTS Overview Market Size Overview Value of the US Residential Housing Market 6 Size of the US Residential Mortgage Market 6 Private Label Securities 7 Agency Mortgage-Backed Securities 7 Origination Volume and Composition First Lien Origination Volume & Share 8 Mortgage Origination Product Type Composition (All Originations & Purchase Originations Only) 9 Securitization Volume and Composition Agency/Non-Agency Share of Residential MBS Issuance 1 Non-Agency MBS Issuance 1 Non-Agency Securitization 1 Agency Activity: Volumes and Purchase/Refi Composition Agency Gross Issuance 11 Percent Refi at Issuance 11 Non-bank Origination Share Nonbank Origination Share: All Loans 12 Nonbank Origination Share: Purchase Loans 12 Nonbank Origination Share: Refi Loans 12 Non-bank Credit Box Agency FICO: Bank vs. Nonbank 13 GSE FICO: Bank vs. Nonbank 13 Ginnie Mae FICO: Bank vs. Nonbank 13 GSE LTV: Bank vs. Nonbank 14 Ginnie Mae LTV: Bank vs. Nonbank 14 GSE DTI: Bank vs. Nonbank 14 Ginnie Mae DTI: Bank vs. Nonbank 14 State of the Market Mortgage Origination Projections Total Originations and Refinance Shares 15 Housing Starts and Home Sales 15 Credit Availability and Originator Profitability Housing Credit Availability Index (HCAI) 16 Originator Profitability and Unmeasured Costs (OPUC) 16 Credit Availability for Purchase Loans Borrower FICO Score at Origination Month 17 Combined LTV at Origination Month 17 Origination FICO and LTV by MSA 18

4 CONTENTS Housing Affordability National Housing Affordability Over Time 19 Affordability Adjusted for MSA-Level DTI 19 First-Time Homebuyers First-Time Homebuyer Share 2 Comparison of First-time and Repeat Homebuyers, GSE and FHA Originations 2 Home Price Indices National Year-Over-Year HPI Growth 21 Changes in CoreLogic HPI for Top MSAs 21 Negative Equity & Serious Delinquency Negative Equity Share 22 Loans in Serious Delinquency 22 Modifications and Liquidations Loan Modifications and Liquidations (By Year & Cumulative) 23 GSEs under Conservatorship GSE Portfolio Wind-Down Fannie Mae Mortgage-Related Investment Portfolio 24 Freddie Mac Mortgage-Related Investment Portfolio 24 Effective Guarantee Fees & GSE Risk-Sharing Transactions Effective Guarantee Fees 25 Fannie Mae Upfront Loan-Level Price Adjustment 25 GSE Risk-Sharing Transactions and Spreads Serious Delinquency Rates Serious Delinquency Rates Fannie Mae & Freddie Mac 28 Serious Delinquency Rates Single-Family Loans & Multifamily GSE Loans 29 Agency Issuance Agency Gross and Net Issuance Agency Gross Issuance 3 Agency Net Issuance 3 Agency Gross Issuance & Fed Purchases Monthly Gross Issuance 31 Fed Absorption of Agency Gross Issuance 31 Mortgage Insurance Activity MI Activity & Market Share 32 FHA MI Premiums for Typical Purchase Loan 33 Initial Monthly Payment Comparison: FHA vs. PMI 33 Related HFPC Work Publications and Events 34

5 INTRODUCTION Continued impact of fall hurricanes on mortgage delinquencies The three hurricanes Harvey, Irma and Maria that hit Texas, Florida and Puerto Rico last fall continue to take their toll on mortgage delinquencies, per latest data from the Mortgage Bankers Association for Q The previous release of this data (Q3 217) had showed a large (and expected) increase in the 3 day delinquency rate in the affected areas, as we had discussed in the November chartbook introduction. The updated delinquency data for Q4 217 is very useful in studying the delinquency pattern beyond the initial 3 days. At the nationwide level, the D3 rate declined from Q3 to Q4 217 for all loans (from 2.84 to 2.75 percent), likely because some borrowers resumed monthly payments after the initial shock, and others became 6 or more days delinquent; indeed, D6 and D9 rates increased from.86 to.99 percent and from 1.29 to 1.72 percent respectively. This general pattern held across all three channels - conventional, FHA and VA. Although serious delinquency rates will remain elevated for some time as these mortgages get resolved, the decline in the 3 day delinquency indicates that fewer borrowers became newly delinquent in the fourth quarter, further suggesting that the worst might be over. More recent data from Ginnie Mae, for FHA and VA delinquencies confirms that we have seen the highs in the delinquency rate. Loans 9 days or more delinquent Percent Puerto Rico Florida Texas United States Source: Mortgage Bankers Association and Urban Institute. That said, the data also paint a very bleak picture of delinquencies in Puerto Rico, which experienced the most property damage and destruction from Hurricane Maria. As of Q4 217, 5.85 percent of all mortgages in Puerto Rico were 3 to 59 days delinquent, 6.5 percent were 6 to 89 days delinquent, 18.5 percent were 9 days more delinquent and another 6.5 percent were in foreclosure. Thus, a total of 36.9 percent of all mortgages in Puerto Rico were in some stage of nonperformance. The high 9-day delinquency rate in particular is concerning because it suggests that a large number of Puerto Rican homeowners were unable to resume payments even after three months. The 9-day DQ rate, while elevated in Florida and Texas, is orders of magnitude higher in Puerto Rico. We expect these delinquency rates to decline next quarter, as these loans get resolved, many through reperformance. But that won t necessarily be the end of the problem, especially for Puerto Rico. Only 4 percent of homes in Puerto Rico have mortgages, compared with 64 percent in the US. Many residents already have or will become homeless; others will be forced to live in unsafe structures. Weakness in the local economy and high unemployment rate will persist, forcing many more to migrate to the mainland and start from the scratch. Indeed, Hurricane Maria will continue to take a toll on the people of Puerto Rico long after the current delinquency cycle improves. INSIDE THIS ISSUE Ginnie Mae s nonbank share edged up to new high in January 218; Freddie Mac and Fannie Mae also saw increases in their non-bank share, leaving them just a touch off their all-time highs (page 12). Ginnie Mae median DTI continued to increase in January 218 (page 14) Originator profitability measure continued to fall in January 218 as rates went up (page 16) Serious delinquencies for single-family GSE loans, FHA loans and VA loans all moved up in Q4 217, mostly due to the recent hurricanes (pages 22, 28 and 29). Both Fannie and Freddie s average g-fees on new acquisitions continued to decline in Q4 217 (page 25). FHA, VA and PMI s mortgage insurance activities all decreased in Q4 217, while VA lost market share to FHA and PMI in 217 (page 32).

6 OVERVIEW MARKET SIZE OVERVIEW Since 212, the Federal Reserve s Flow of Funds report has consistently indicated an increasing total value of the housing market, driven by growing household equity and 217 Q3 was no different. While total debt and mortgages was stable at $1.5 trillion, household equity reached a new high of $14.9 trillion, bringing the total value of the housing market to $25.4 trillion, surpassing the pre-crisis peak of $23.9 trillion in 26. Agency MBS make up 59.7 percent of the total mortgage market, private-label securities make up 4.6 percent, and unsecuritized first liens at the GSEs, commercial banks, savings institutions, and credit unions make up 3.3 percent. Second liens comprise the remaining 5.5 percent of the total. Value of the US Housing Market Debt, household mortgages Household equity Total value ($ trillions) $25.4 $14.9 $ Q3 Sources: Federal Reserve Flow of Funds and Urban Institute. Last updated December 217. Size of the US Residential Mortgage Market ($ trillions) 7 6 Agency MBS Unsecuritized first liens Private Label Securities Second Liens $ Debt, household mortgages, $9,833 $ $.58 $ Q3 Sources: Federal Reserve Flow of Funds, Inside Mortgage Finance, Fannie Mae, Freddie Mac, embs and Urban Institute. Last updated December 217. Note: Unsecuritized first liens includes loans held by commercial banks, GSEs, savings institutions, and credit unions. 6

7 OVERVIEW MARKET SIZE OVERVIEW As of December 217, debt in the private-label securitization market totaled $497 billion and was split among prime (18.3 percent), Alt-A (38.2 percent), and subprime (43.4 percent) loans. In January 218, outstanding securities in the agency market totaled $6.4 trillion and were 43.8 percent Fannie Mae, 27.4 percent Freddie Mac, and 28.9 percent Ginnie Mae. Ginnie Mae has had more outstanding securities than Freddie Mac since May 216. Private-Label Securities by Product Type ($ trillions) Alt-A Subprime Prime Sources: CoreLogic and Urban Institute. December 217 Agency Mortgage-Backed Securities ($ trillions) Fannie Mae Freddie Mac Ginnie Mae Total Sources: embs and Urban Institute. January 218 7

8 OVERVIEW ORIGINATION VOLUME AND COMPOSITION First Lien Origination Volume After a record high origination year in 216 ($2.1 trillion), the first lien originations totaled $1.3 trillion in the first three quarters of 217, down 9 percent from the same period last year, mostly due to elevated interest rates. The share of portfolio originations was 29 percent, down slightly from 3 percent in 216. The GSE share was around 45 percent, down from 46 percent in 216. The FHA/VA share was slightly up: 25 percent for the first three quarters of 217 versus 24 percent in 216. Origination of private-label securities was well under 1 percent in both periods. ($ trillions) $4. $3.5 $3. $2.5 $2. GSE securitization FHA/VA securitization PLS securitization Portfolio $1.5 $.388 $1. $.5 $.7 $.334 $.66 $ Q1- Sources: Inside Mortgage Finance and Urban Institute. Last updated January 218. Q3 (Share, percent) 1% 9% 8% 7% 6% 5% 4% 29.1%.56% 25.% 45.4% 3% 2% 1% % Q1- Q3 Sources: Inside Mortgage Finance and Urban Institute. Last updated January

9 OVERVIEW MORTGAGE MORTGAGE ORIGINATION ORIGINATION PRODUCT PRODUCT TYPE Adjustable-rate TYPEmortgages (ARMs) accounted for as much as 42 percent of all new originations during the peak of the 25 housing bubble (top chart). The ARMs fell to an historic low of 1 percent in 29, and then slowly grew to a high of 6 percent in April 214. Since then, ARMs have begun to decline again to 2. percent in November 217. The 15-year fixed-rate mortgage (FRM), predominantly a refinance product, accounted for 11.9 percent of new originations in November 217. If we exclude refinances (bottom chart), the share of 3-year FRMs in November 217 stood at 91. percent, 15-year FRMs at 4.6 percent, and ARMs at 1.8 percent. All Originations 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Fixed-rate 3-year mortgage Fixed-rate 15-year mortgage Adjustable-rate mortgage Other % Sources: CoreLogic, embs, HMDA, SIFMA and Urban Institute. November 217 Purchase Loans Only Fixed-rate 3-year mortgage Fixed-rate 15-year mortgage Adjustable-rate mortgage Other 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Sources: CoreLogic, embs, HMDA, SIFMA and Urban Institute. November 217 9

10 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan YTD OVERVIEW SECURITIZATION VOLUME AND COMPOSITION Agency/Non-Agency Share of Residential MBS Issuance The non-agency share of mortgage securitizations in the first month of 218 was 3.6 percent, compared to 3.4 percent in 217 and 1.8 percent in 216. The non-agency securitization volume totaled $56.4 billion in 217, a 3 percent increase over the previous year. Much of the volume was in non-performing and re-performing (scratch and dent) deals. The volume of prime securitizations in 217 totaled $1.88 billion, compared to $9.32 billion in 216. Nonagency securitizations continue to be tiny compared to pre-crisis levels. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Agency share Non-Agency share 96.45% 3.55% Sources: Inside Mortgage Finance and Urban Institute. Note: Based on data from January 217. ($ billions) $1,4 $1,2 Non-Agency MBS Issuance Re-REMICs and other Scratch and dent Alt A Subprime Prime ($ billions) $14 $12 Monthly Non-Agency Securitization $1, $1 $8 $6 $4 $2 $ $4.61 $32.22 $5.28 $2.1 $1.88 $8 $6 $4 $ $- $ Sources: Inside Mortgage Finance and Urban Institute. Sources: Inside Mortgage Finance and Urban Institute. 1

11 Jul-4 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 OVERVIEW AGENCY ACTIVITY: VOLUMES AND PURCHASE/ REFI COMPOSITION Agency issuance totaled $14 billion in the first month of 218, $1.247 trillion on an annualized basis. This is down about 23.9 percent from the first month of 217. In January 218, the change in the refinance share was inconsistent between agencies: declining for Freddie Mac, declining slightly for Ginnie Mae and increasing for Fannie Mae. Agency Gross Issuance ($ trillions) Fannie Mae Freddie Mac Ginnie Mae $.42 $.26.5 $ Ann. Sources: embs and Urban Institute. Note: Annualized figure based on data from January 218. Note: Annualized figure based on data from November 217. Percent Refi at Issuance Freddie Mac Fannie Mae Ginnie Mae Mortgage rate Percent refi 9% 8% 7% 6% 5% 4% 3% 2% 1% % Mortgage rate 9.% 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% Sources: embs and Urban Institute. Note: Based on at-issuance balance. Figure based on data from January

12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 OVERVIEW NONBANK ORIGINATION SHARE The nonbank origination share has increased for all three agencies since 213. In January 218, Ginnie Mae s nonbank share edged up to new high of 81 percent. Nonbank originator shares for Freddie Mac and Fannie Mae both moved back towards the historic highs reached in November 217, after the dip in December. The nonbank originator share is higher for refinance loans than for purchase loans across all three agencies. Nonbank Origination Share: All Loans All Fannie Freddie Ginnie 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 81% 63% 54% Sources: embs and Urban Institute. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Nonbank Origination Share: Purchase Loans % All Fannie Freddie Ginnie Nonbank Origination Share: Refi Loans 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % All Fannie Freddie Ginnie Sources: embs and Urban Institute Sources: embs and Urban Institute 12

13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 OVERVIEW NONBANK CREDIT BOX Nonbank originators have played a key role in opening up access to credit. The median GSE and the median Ginnie Mae FICO scores for loans originated by nonbanks are lower than their bank counterparts. Within the GSE space, both bank and nonbank FICOs have declined since 214 with further relaxation in FICOs in 217. In contrast, within the Ginnie Mae space, FICO scores for bank originations have increased since 214 while nonbank FICOs have declined. This largely reflects the sharp cut-back in FHA lending by many banks. Agency FICO: Bank vs. Nonbank FICO All Median FICO Bank Median FICO Nonbank Median FICO Sources: embs and Urban Institute. GSE FICO: Bank vs. Nonbank All Median FICO Bank Median FICO Nonbank Median FICO FICO Ginnie Mae FICO: Bank vs. Nonbank FICO All Median FICO Nonbank Median FICO Bank Median FICO Sources: embs and Urban Institute. Sources: embs and Urban Institute. 13

14 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 OVERVIEW NONBANK CREDIT BOX The median LTV ratios for loans originated by nonbanks are similar to their bank counterparts, while the median DTIs for nonbank loans are higher, indicating that nonbanks are more accommodating in this as well as in the FICO dimension. Note that in 217 there has been a measurable increase in DTIs. This is true for both Ginnie Mae and GSE loans, banks and nonbank originators. This rising DTI trend continued for Ginnie Mae in the first month of 218. LTV GSE LTV: Bank vs. Nonbank All Median LTV Nonbank Median LTV Bank Median LTV Ginnie Mae LTV: Bank vs. Nonbank LTV All Median LTV Nonbank Median LTV Bank Median LTV Sources: embs and Urban Institute. Sources: embs and Urban Institute. GSE DTI: Bank vs. Nonbank Ginnie Mae DTI: Bank vs. Nonbank DTI 42 All Median DTI Nonbank Median DTI Bank Median DTI DTI 42 All Median DTI Nonbank Median DTI Bank Median DTI Sources: embs and Urban Institute. Sources: embs and Urban Institute. 14

15 STATE OF THE MARKET MORTGAGE ORIGINATION PROJECTIONS Fannie Mae, Freddie Mac and MBA all forecast origination volume in 218 to be marginally lower than the billion estimated for 217. These 217 and 218 numbers are considerably lower than the $2. trillion of originations in 216. The differences owe primarily to a decline the refi share: from percent in 216 to percent in 217 to a forecast percent in 218. Fannie, Freddie and MBA all forecast 218 housing starts to be million units, up from an estimated 1.2 million units in 217. Home sales forecasts for 218 range from 6.2 million to 6.4 million, a percent rise from 217 levels. Total Originations and Refinance Shares Originations ($ billions) Refi Share (%) Period Total, FNMA Total, FHLMC Total, MBA FNMA FHLMC MBA estimate estimate estimate estimate estimate estimate 217 Q Q Q Q Q Q Q Q FY FY FY FY FY FY Sources: Fannie Mae, Freddie Mac, Mortgage Bankers Association and Urban Institute. Note: Shaded boxes indicate forecasted figures. All figures are estimates for total single-family market. Column labels indicate source of estimate. Regarding interest rates, the yearly averages for 214, 215, 216 and 217 were 3.6%, 3.7%, 3.6%, and 4.%. For 218, the respective projections for Fannie, Freddie, and MBA are 4.%, 4.5%, and 4.8%. Housing Starts and Homes Sales Housing Starts, thousands Home Sales. thousands Year Total, FNMA estimate Total, FHLMC estimate Total, MBA estimate Total, FNMA estimate Total, FHLMC estimate Total, MBA estimate Existing, MBA estimate New, MBA Estimate FY FY FY FY FY FY Sources: Mortgage Bankers Association, Fannie Mae, Freddie Mac and Urban Institute. Note: Shaded boxes indicate forecasted figures. All figures are estimates for total single-family market; column labels indicate source of estimate. 15

16 STATE OF THE MARKET CREDIT AVAILABILITY AND ORIGINATOR PROFITABILITY Housing Credit Availability Index (HCAI) HFPC s Housing Credit Availability Index (HCAI) assesses lenders tolerance for both borrower risk and product risk, calculating the share of owner-occupied purchase loans that are likely to default. The index shows that credit availability increased to 5.6 percent, the highest level since 213, in the third quarter of 217 (Q3 217). This increase was mainly driven by the credit expansions within both the GSE and government channels, thanks to higher interest rates and lower refinance volumes. More information about the HCAI, including the breakdown by market segment, is available here. Percent Originator Profitability and Unmeasured Costs When originator profits are higher, mortgage volumes are less responsive to changes in interest rates, because originators are at capacity. Originator Profitability and Unmeasured Costs (OPUC), formulated and calculated by the Federal Reserve Bank of New York, is a good relative measure of originator profitability. OPUC uses the sales price of the mortgage in the secondary market (less par) and adds two additional sources of profitability; retained servicing (both base and excess servicing, net of g-fees) and points paid by the borrower. Over the last four years, OPUC has ranged from a high of $3.24 in July 216 when interest rates were low, to around $2. on a number of occasions when rates were higher. In January 218, it stood at $1.88, near the lower end of the range, reflecting relatively higher interest rates. Dollars per $1 loan Reasonable lending standards Product risk Total default risk Borrower risk Sources: embs, Corelogic, HMDA, IMF, and Urban Institute. Note: Default is defined as 9 days or more delinquent at any point. Last updated January 217. Q January 218 Sources: Federal Reserve Bank of New York, updated monthly and available at this link: and Urban Institute. 16 Note: OPUC is a is a monthly (4-week moving) average as discussed in Fuster et al. (213). 1.88

17 STATE OF THE MARKET CREDIT AVAILABILITY FOR PURCHASE LOANS Access to credit remains extremely tight, especially for borrowers with low FICO scores. The mean and median FICO scores on new purchase originations have both drifted up about 21 and 2 points over the last decade, respectively. The 1th percentile of FICO scores, which represents the lower bound of creditworthiness needed to qualify for a mortgage, stood at 646 as of November 217. Prior to the housing crisis, this threshold held steady in the low 6s. Mean LTV levels at origination remain relatively high, averaging 87., which reflects the large number of FHA purchase originations. Borrower FICO Score at Origination FICO Score 85 9th percentile Mean Median 1th percentile Sources: CoreLogic, embs, HMDA, SIFMA and Urban Institute. Note: Includes owner-occupied purchase loans only. November 217 Combined LTV at Origination LTV 11 9th percentile Mean Median 1th percentile Sources: Corelogic, embs, HMDA, SIFMA and Urban Institute. Note: Includes owner-occupied purchase loans only. November

18 San Francisco-Redwood City-South San Francisco CA San Jose-Sunnyvale-Santa Clara CA Oakland-Hayward-Berkeley CA Los Angeles-Long Beach-Glendale CA San Diego-Carlsbad CA Seattle-Bellevue-Everett WA Denver-Aurora-Lakewood CO Portland-Vancouver-Hillsboro OR-WA Washington-Arlington-Alexandria DC-VA-MD-WV Sacramento--Roseville--Arden-Arcade CA Minneapolis-St. Paul-Bloomington MN-WI Chicago-Naperville-Arlington Heights IL Phoenix-Mesa-Scottsdale AZ Baltimore-Columbia-Towson MD Nassau County-Suffolk County NY Pittsburgh PA Kansas City MO-KS St. Louis MO-IL Newark NJ-PA Philadelphia PA Columbus OH Charlotte-Concord-Gastonia NC-SC Tampa-St. Petersburg-Clearwater FL Dallas-Plano-Irving TX San Antonio-New Braunfels TX Las Vegas-Henderson-Paradise NV Houston-The Woodlands-Sugar Land TX Atlanta-Sandy Springs-Roswell GA Riverside-San Bernardino-Ontario CA Fort Worth-Arlington TX Cleveland-Elyria OH Orlando-Kissimmee-Sanford FL Cincinnati OH-KY-IN Miami-Miami Beach-Kendall FL Detroit-Dearborn-Livonia MI STATE OF THE MARKET CREDIT AVAILABILITY FOR PURCHASE LOANS Credit has been tight for all borrowers with less-than-stellar credit scores--especially in MSAs with high housing prices. For example, the mean origination FICO for borrowers in San Francisco-Redwood City-South San Francisco, CA is 773, while in Detroit-Dearborn-Livonia MI it is 735. Across all MSAs, lower average FICO scores tend to be correlated with high average LTVs, as these MSAs rely heavily on FHA/VA financing. Origination FICO and LTV Origination FICO Mean origination FICO score Mean origination LTV Origination LTV Sources: CoreLogic, embs, HMDA, SIFMA and Urban Institute. Note: Includes owner-occupied purchase loans only. Data as of November

19 San Francisco-Redwood City-South San Francisco CA San Jose-Sunnyvale-Santa Clara CA Los Angeles-Long Beach-Glendale CA Miami-Miami Beach-Kendall FL Seattle-Bellevue-Everett WA Portland-Vancouver-Hillsboro OR-WA Riverside-San Bernardino-Ontario CA Philadelphia PA Dallas-Plano-Irving TX Orlando-Kissimmee-Sanford FL Phoenix-Mesa-Scottsdale AZ Denver-Aurora-Lakewood CO Oakland-Hayward-Berkeley CA San Diego-Carlsbad CA Sacramento--Roseville--Arden-Arcade CA Las Vegas-Henderson-Paradise NV Fort Worth-Arlington TX Tampa-St. Petersburg-Clearwater FL Washington-Arlington-Alexandria DC-VA-MD-WV Detroit-Dearborn-Livonia MI Charlotte-Concord-Gastonia NC-SC Boston MA New York-Jersey City-White Plains NY-NJ Atlanta-Sandy Springs-Roswell GA San Antonio-New Braunfels TX Baltimore-Columbia-Towson MD Houston-The Woodlands-Sugar Land TX Minneapolis-St. Paul-Bloomington MN-WI Nassau County-Suffolk County NY St. Louis MO-IL Kansas City MO-KS Cincinnati OH-KY-IN Chicago-Naperville-Arlington Heights IL Columbus OH Pittsburgh PA Cleveland-Elyria OH Newark NJ-PA STATE OF THE MARKET HOUSING AFFORDABILITY National Housing Affordability Over Time Home prices remain affordable by historic standards, despite increases over the last five years and the recent interest rate hikes. Even if interest rates rise to 4.75 percent, affordability would still be at the long-term historical average. Sources: CoreLogic, US Census, Freddie Mac and Urban Institute. Note: The maximum affordable price is the house price that a family can afford putting 2 percent down, with a monthly payment of 28 percent of median family income, at the Freddie Mac prevailing rate for 3-year fixedrate mortgage, and property tax and insurance at 1.75 percent of housing value. Housing Prices ($ thousands) $32 $27 $22 $17 $12 Median sales price Max affordable price at 4.75% rate Affordability Adjusted for MSA-Level DTI Credit Bubble Max affordable price November 217 $324,868 $33,126 $247,5 Ratio Sources: CoreLogic, US Census, Freddie Mac and Urban Institute calculations based on NAR methodology. Note: Index is calculated relative to home prices in 2-3. A ratio above 1 indicates higher affordability in November 217 than in

20 STATE OF THE MARKET FIRST-TIME HOMEBUYERS First-Time Homebuyer Share In November 217, the first-time homebuyer share of GSE purchase loans was 46.9 percent, just off the highest level in recent history of 48.1 percent, achieved in April 217. The FHA has always been more focused on first-time homebuyers, with its first-time homebuyer share hovering around 8 percent; it stood at 81.9 percent in November 217. The bottom table shows that based on mortgages originated in November 217, the average first-time homebuyer was more likely than an average repeat buyer to take out a smaller loan and have a lower credit score and higher LTV and DTI, thus requiring a higher interest rate. 9% 8% 7% GSEs FHA GSEs and FHA % 5% 4% % 2% Sources: embs, Federal Housing Administration (FHA ) and Urban Institute. Note: All series measure the first-time homebuyer share of purchase loans for principal residences. November 217 Comparison of First-Time and Repeat Homebuyers, GSE and FHA Originations GSEs FHA GSEs and FHA Characteristics First-time Repeat First-time Repeat First-time Repeat Loan Amount ($) 229,15 251,456 22,92 223, , ,848 Credit Score LTV (%) DTI (%) Loan Rate (%) Sources: embs and Urban Institute. Note: Based on owner-occupied purchase mortgages originated in November

21 STATE OF THE MARKET HOME PRICE INDICES National Year-Over-Year HPI Growth While the strong year-over-year home price growth from 212 to 213 has slowed somewhat, home price appreciation remains robust as measured by the repeat sales index from CoreLogic and hedonic index from Zillow. We will continue to closely monitor how rising mortgage rates impact this strong growth. Year-over-year growth rate 2% 15% CoreLogic HPI 1% 5% % -5% -1% -15% Zillow HPI -2% Sources: CoreLogic, Zillow, and Urban Institute. December 217 Changes in CoreLogic HPI for Top MSAs After rising 51.2 percent from the trough, national house prices have now surpassed pre-crisis peak levels. At the MSA level, ten of the top 15 MSAs have reached their peak HPI: New York, NY; Los Angeles, CA; Atlanta, GA; Houston, TX; Dallas, TX; Minneapolis, MN; Seattle, WA; Denver, CO, San Diego, CA, and Anaheim, CA. Two MSAs particularly hard hit by the boom and bust Phoenix, AZ and Riverside, CA would each need to rise 19.3 and 19.7 percent, respectively, to return to peak levels. MSA 2 to peak HPI changes (%) Peak to trough Trough to current % Rise needed to achieve peak United States 93.7% -33.2% 51.2% -1.% New York-Jersey City-White Plains NY-NJ 111.6% -16.7% 3.3% -7.8% Los Angeles-Long Beach-Glendale CA 177.% -38.4% 72.9% -6.1% Chicago-Naperville-Arlington Heights IL 65.9% -35.7% 36.3% 14.% Atlanta-Sandy Springs-Roswell GA 38.% -32.9% 62.4% -8.3% Washington-Arlington-Alexandria DC-VA-MD-WV 155.2% -34.1% 37.1% 1.8% Houston-The Woodlands-Sugar Land TX 39.6% -14.1% 46.7% -2.7% Phoenix-Mesa-Scottsdale AZ 123.7% -52.6% 76.9% 19.3% Riverside-San Bernardino-Ontario CA 186.1% -52.6% 76.2% 19.7% Dallas-Plano-Irving TX 34.3% -13.8% 6.3% -27.6% Minneapolis-St. Paul-Bloomington MN-WI 72.9% -3.3% 45.% -1.1% Seattle-Bellevue-Everett WA 9.9% -29.1% 83.7% -23.2% Denver-Aurora-Lakewood CO 35.6% -13.1% 76.5% -34.8% Baltimore-Columbia-Towson MD 122.8% -24.6% 16.6% 13.7% San Diego-Carlsbad CA 144.9% -37.5% 64.1% -2.5% Anaheim-Santa Ana-Irvine CA 16.6% -35.7% 57.% -1.% 6.6% 6.5% Sources: CoreLogic HPIs and Urban Institute. Data as of December 217. Note: This table includes the largest 15 Metropolitan areas by mortgage count. 21

22 4Q1 2Q2 4Q2 2Q3 4Q3 2Q4 4Q4 2Q5 4Q5 2Q6 4Q6 2Q7 4Q7 2Q8 4Q8 2Q9 4Q9 2Q1 4Q1 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 3Q9 4Q9 1Q1 2Q1 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 STATE OF THE MARKET NEGATIVE EQUITY & SERIOUS DELINQUENCY Negative Equity Share Negative equity Near or in negative equity With housing prices continuing to appreciate, residential properties in negative equity (LTV greater than 1) as a share of all residential properties with a mortgage continued to decline and stood at 4.9 percent as of Q Residential properties in near negative equity (LTV between 95 and 1) comprise another 1.2 percent. 35% 3% 25% 2% 15% 1% 5% % 6.1% 4.9% Sources: CoreLogic and Urban Institute. Note: CoreLogic negative equity rate is the percent of all residential properties with a mortgage in negative equity. Loans with negative equity refer to loans above 1 percent LTV. Loans near negative equity refer to loans above 95 percent LTV. Last updated December 217. Loans in Serious Delinquency/Foreclosure Due to the hurricanes in the fall of 217, 9 day delinquencies increased from 1.29 to 1.72 percent in Q The percent of loans in foreclosure continued to edge down to 1.19 percent. The combined delinquencies totaled 2.91 percent in Q4 217, up from 2.52 percent in Q3 217 but down from 3.13 percent in the same quarter a year ago. Percent of loans 9 days delinquent or in foreclosure Percent of loans 9 days delinquent 12% 1% 8% Percent of loans in foreclosure 6% 4% 2% % 2.9% 1.7% 1.2% Sources: Mortgage Bankers Association and Urban Institute. Last updated February

23 STATE OF THE MARKET MODIFICATIONS AND LIQUIDATIONS Total modifications (HAMP and proprietary) are roughly equal to total liquidations. Hope Now reports show 8,297,647 borrowers have received a modification since Q3 27, compared with 8,58,942 liquidations in the same period. Modifications and liquidations have slowed significantly over the past few years. In the first nine months of 217, there were just 219,516 modifications and 218,641 liquidations. Loan Modifications and Liquidations Number of loans (thousands) 1,6 1,4 1,2 1, (Q3- Q4) September 217 HAMP mods Proprietary mods Liquidations Sources: Hope Now and Urban Institute. Note: Liquidations include both foreclosure sales and short sales. Last updated December 217. Cumulative Modifications and Liquidations Number of loans (millions) (Q3-Q4) September 217 HAMP mods Proprietary mods Liquidations Sources: Hope Now and Urban Institute. Note: Liquidations includes both foreclosure sales and short sales. Last updated December

24 GSES UNDER CONSERVATORSHIP GSE PORTFOLIO WIND-DOWN Both GSEs continue to contract their portfolios. During calendar year 216, Fannie Mae has contracted by 15.3 percent and Freddie Mac by 15.1 percent. They are shrinking their less-liquid assets (mortgage loans and nonagency MBS) faster than they are shrinking their entire portfolio. As of December 217, both Fannie Mae and Freddie Mac are below their year-end 217 portfolio cap. Fannie Mae is also below the long run portfolio cap of $25 billion that each GSE is required to reach by year-end 218, and Freddie Mac is just above the cap. Fannie Mae Mortgage-Related Investment Portfolio Composition ($ billions) FNMA MBS in portfolio Non-FNMA agency MBS Non-agency MBS Mortgage loans Current size: $23.8 billion 217 cap: $288.4 billion Shrinkage year-over-year: 15.3% Shrinkage in less-liquid assets yearover-year: 2.7% December 217 Sources: Fannie Mae and Urban Institute. Freddie Mac Mortgage-Related Investment Portfolio Composition ($ billions) FHLMC MBS in portfolio Non-FHLMC agency MBS Non-agency MBS Mortgage loans Sources: Freddie Mac and Urban Institute. Current size:$253.5 billion 217 cap: $288.4 billion Shrinkage year-over-year: 15.1% Shrinkage in less-liquid assets yearover-year: 22.9% December

25 2Q9 4Q9 2Q1 4Q1 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 GSES UNDER CONSERVATORSHIP EFFECTIVE GUARANTEE FEES Guarantee Fees Charged on New Acquisitions The latest 1-K indicates that Fannie s average g-fees on new acquisitions decreased from 57.1 to 55 bps in Q4 217 and Freddie s decreased from 52 to 47 bps. This is still a marked increase over 212 and 211, and has contributed to the GSEs profits. The GSE s latest Loan- Level Pricing Adjustments (LLPAs) took effect in September 215; the bottom table shows the Fannie Mae LLPAs, which are expressed as upfront charges. Sources: Fannie Mae, Freddie Mae and Urban Institute. Last updated February 218. Basis points Fannie Mae single-family average charged g-fee on new acquisitions Freddie Mac single-family guarantee fees charged on new acquisitions Fannie Mae Upfront Loan-Level Price Adjustments (LLPAs) Credit Score > 74.%.25%.25%.5%.25%.25%.25%.75% %.25%.5%.75%.5%.5%.5% 1.% %.5% 1.% 1.25% 1.% 1.% 1.% 1.5% %.5% 1.25% 1.75% 1.5% 1.25% 1.25% 1.5% % 1.% 2.25% 2.75% 2.75% 2.25% 2.25% 2.25% % 1.25% 2.75% 3.% 3.25% 3.75% 2.75% 2.75% % 1.5% 3.% 3.% 3.25% 3.25% 3.25% 3.5% < 62.5% 1.5% 3.% 3.% 3.25% 3.25% 3.25% 3.75% Product Feature (Cumulative) High LTV.%.%.%.%.%.%.%.% Investment Property 2.125% 2.125% 2.125% 3.375% 4.125% N/A N/A N/A Sources: Fannie Mae and Urban Institute. Note: For whole loans purchased on or after September 1, 215, or loans delivered into MBS pools with issue dates on or after September 1, 215. LTV 25

26 GSES UNDER CONSERVATORSHIP GSE RISK-SHARING TRANSACTIONS Fannie Mae and Freddie Mac have been laying off back-end credit risk through CAS and STACR deals as well as through reinsurance transactions. They have also done a few front-end transactions with originators and experimented with deep mortgage insurance coverage with private mortgage insurers. FHFA s 218 scorecard requires the GSEs to lay off credit risk on 9 percent of newly acquired loans in categories targeted for transfer. Fannie Mae's CAS issuances to date cover 35.6 percent of its guarantees, while Freddie's STACR covers 51 percent. In December 217, Freddie Mac issued a $2 million STACR deal which is part of a new HRP Series. Loans in this series are backed by Relief Refinance loans, including loans that meet the Home Affordable Refinance Program (HARP) eligibility criteria. In 218, Freddie issued a security in January, and Fannie issued one in February. Fannie Mae Connecticut Avenue Securities (CAS) Date Transaction Reference Pool Size ($ m) Amount Issued ($m) % of Reference Pool Covered 213 CAS 213 deals $26,756 $ % 214 CAS 214 deals $227, 234 $5, % 215 CAS 215 deals $187,126 $5, % February 216 CAS 216 C1 $28,882 $ % March 216 CAS 216 C2 $35,4 $1,32 2.9% April 216 CAS 216 C3 $36,87 $1, % July 216 CAS 216 C4 $42,179 $1, % August 216 CAS C5 $38,668 $1,22 3.1% November 216 CAS C6 $33,124 $1,24 3.1% December 216 CAS 216 C7 $22,515 $72 3.1% January 217 CAS 217 C1 $43,758 $1, % March 217 CAS 217 C2 $39,988 $1,33 3.3% May 217 CAS 217 C3 $41,246 $1, % May 217 CAS 217 C4 $3,154 $1,3 3.3% July 217 CAS 217 C5 $43,751 $1, % August 217 CAS 217 C6 $31,9 $1,11 3.5% November 217 CAS 217 C7 $33,9 $1,2 3.5% February 218 CAS 218 C1 $44,9 $1, % Total $987,172 $29,58 3.% Percent of Fannie Mae s Total Book of Business 35.64% Freddie Mac Structured Agency Credit Risk (STACR) Date Transaction Reference Pool Size ($ m) Amount Issued ($m) % of Reference Pool Covered 213 STACR 213 deals $57,912 $1,13 2.% 214 STACR 214 deals $147,12 $4, % 215 STACR 215 deals $29,521 $6, % January 216 STACR Series 216 DNA1 $35,7 $ % March 216 STACR Series 216 HQA1 $17,931 $ % May 216 STACR Series 216 DNA2 $3,589 $916 3.% May 216 STACR Series 216 HQA2 $18,4 $ % June 216 STACR Series 216 DNA3 $26,4 $795 3.% September 216 STACR Series 216 HQA3 $15,79 $ % September 216 STACR Series 216 DNA4 $24,845 $739 3.% October 216 STACR Series HQA4 $13,847 $ % January 217 STACR Series 217 DNA1 $33, 965 $82 2.4% February 217 STACR Series 217 HQA1 $29,7 $ % April 217 STACR Series 217 DNA2 $6,716 $1,32 2.2% June 217 STACR Series 217 HQA2 $31,64 $ % September 217 STACR Series 217 DNA3 $56,151 $1,2 2.1% October 217 STACR Series 217 HQA3 $21,641 $6 2.8% December 217 STACR Series 217 HRP1 $15,44 $2 1.3% January 218 STACR Series 217 DNA1 $34,733 $9 2.6% Total $897,237 $24,88 2.8% Percent of Freddie Mac s Total Book of Business 5.98% Sources: Fannie Mae, Freddie Mac and Urban Institute. 26 Note: Classes A-H, M-1H, M-2H, and B-H are reference tranches only. These classes are not issued or sold. The risk is retained by Fannie Mae and Freddie Mac. CE = credit enhancement.

27 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 GSES UNDER CONSERVATORSHIP GSE RISK-SHARING SPREADS CAS and STACR spreads have moved around considerably since 213, with the bottom mezzanine tranche and the first loss bonds experiencing considerably more volatility than the top mezzanine bonds. Tranche B in particular has been highly volatile because of its first loss position. Spreads widened especially during Q1 216 due to falling oil prices, concerns about global economic growth and the slowdown in China. Since then spreads have resumed their downward trend but remain volatile. The STACR deal issued in December, not shown below, is part of a new HRP series with marked-to-market LTVs between 6 and 15 percent. Fannie Mae CAS Spreads at-issuance (basis points over 1-month LIBOR) Basis points (bps) 14 Low-LTV Pools (61 to 8 %) Basis points (bps) 14 High-LTV Pools (81 to 95 %) 12 Tranche 1B 12 Tranche 2B Tranche 1M-2 8 Tranche 2M-2 Tranche 2B Tranche 1M-1 Tranche 1B Tranche 2M Freddie Mac STACR Spreads at-issuance (basis points over 1-month LIBOR) Basis points (bps) Low-LTV Pools (61 to 8 %) Tranche B Tranche B-2 Basis points (bps) High-LTV Pools (81 to 95 %) Tranche B Tranche B Tranche M-3 Tranche B-1 6 Tranche M-3 Tranche B-1 4 Tranche M-2 4 Tranche M Tranche M-1 Tranche M-1 Sources: Fannie Mae, Freddie Mac Press Releases and Urban Institute. 27

28 SERIOUS GSES UNDER CONSERVATORSHIP DELINQUENCY RATES SERIOUS AT DELINQUENCY THE GSEs RATES Serious delinquency rates of GSE loans edged up in December 217, mostly due to recent hurricanes. Despite this recent increase, there has been a marked long term decline in serious delinquency rates as the legacy portfolio is resolved and the pristine, post-29 book of business exhibits very low default rates. As of December 218, 1.24 percent of the Fannie portfolio and 1.8 percent of the Freddie portfolio were seriously delinquent, up from 1.2 percent for Fannie and 1. percent for Freddie in December 216. Serious Delinquency Rates Fannie Mae Percentage of total loans 16% 14% 12% 1% 8% 6% Single-family: Non-credit enhanced (including credit risk transfer) Single-family: Total Credit Risk Transfer Single-family: Credit enhanced (PMI and other) Single-Family: Non-credit enhanced (Excluding credit risk transfer) 4% 1.95% 2% 1.27% 1.24% %.42% Sources: Fannie Mae and Urban Institute. December 217 Note*: Following a change in Fannie reporting in March 217, we started to report the credit risk transfer category and a new non-credit enhanced category that excludes loans covered by either primary MI or credit risk transfer transactions. Fannie reported these two new categories going back to January 216. Serious Delinquency Rates Freddie Mac Single-family: Non-credit enhanced Single-family: Credit enhanced Single-family: Total Freddie Mac: Multifamily Total PMI Credit Enhanced* Credit Enhanced: Other* Percentage of total loans 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % February % 1.16% 1.8%.53% Sources: Freddie Mac and Urban Institute. Note*: Following a change in Freddie reporting in September 214, we switched from reporting credit enhanced delinquency rates to PMI and other credit enhanced delinquency rates. Freddie reported these two categories for credit-enhanced loans going back to August 213. The other category includes single-family loans covered by financial arrangements (other than primary mortgage insurance) including loans in reference pools covered by STACR debt note transactions as well as other forms of credit protection. 28

29 2Q5 4Q5 2Q6 4Q6 2Q7 4Q7 2Q8 4Q8 2Q9 4Q9 2Q1 4Q1 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 GSES UNDER CONSERVATORSHIP SERIOUS DELINQUENCY RATES Serious delinquencies for single-family GSE loans, FHA loans, and VA loans moved up in the fourth quarter of 217, partly due to seasonal factors, but mostly due to the impact of hurricanes Harvey, Irma and Maria. GSE delinquencies remain high relative to 25-27, while FHA and VA delinquencies (which are higher than their GSE counterparts) are at levels lower than GSE multifamily delinquencies have declined to pre-crisis levels, although they did not reach problematic levels even in the worst years of the crisis. In November 217, Fannie multifamily serious delinquency rate rose to.11 percent, its highest level since early 214, mostly due to the recent hurricanes; it remained at this level in December. Freddie remained flat at.2 percent. Serious Delinquency Rates Single-Family Loans 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Fannie Mae Freddie Mac FHA VA 4.78% 3.43% 1.24% 1.8% Sources: Fannie Mae, Freddie Mac, MBA Delinquency Survey and Urban Institute. Note: Serious delinquency is defined as 9 days or more past due or in the foreclosure process. Not seasonally adjusted. Last updated February 218. Serious Delinquency Rates Multifamily GSE Loans Percentage of total loans Fannie Mae Freddie Mac 1.%.9%.8%.7%.6%.5%.4%.3%.2%.1%.% %.2% December 217 Sources: Fannie Mae, Freddie Mac and Urban Institute. Note: Multifamily serious delinquency rate is the unpaid balance of loans 6 days or more past due, divided by the total unpaid balance. 29

30 AGENCY ISSUANCE AGENCY GROSS AND NET ISSUANCE Agency gross issuance was $14 billion in the first month of 218, $1.247 trillion on an annualized basis. This is down 23.9 percent year-over-year. When measured on a monthly basis, the agency gross issuance was lower year-over-year for eleven consecutive months since March 217. Net issuance (which excludes repayments, prepayments, and refinances on outstanding mortgages) totaled $2.6 billion in the first month of 218, down 35.6 percent from the first month of 217. Issuance Year Agency Gross Issuance GSEs Ginnie Mae Total 2 $36.6 $12.2 $462.8 Issuance Year Agency Net Issuance GSEs Ginnie Mae Total 2 $159.8 $29.3 $ $885.1 $171.5 $1, $1,238.9 $169. $1, $1,874.9 $213.1 $2, $872.6 $119.2 $ $894. $81.4 $ $853. $76.7 $ $1,66.2 $94.9 $1, $911.4 $267.6 $1, $1,28. $451.3 $1, $1,3.5 $39.7 $1, $879.3 $315.3 $1, $1,288.8 $45. $1, $1,176.6 $393.6 $1, $65.9 $296.3 $ $845.7 $436.3 $1, $991.6 $58.2 $1, $ $ $1, YTD $68.79 $35.16 $ $ $9.9 $ $ $51.2 $ $ $77.6 $ $82.5 -$4.1 $ $ $42.2 $ $313.6 $.2 $ $514.9 $3.9 $ $314.8 $196.4 $ $25.6 $257.4 $ $33.2 $ $ $128.4 $149.6 $ $42.4 $119.1 $ $69.1 $87.9 $ $3.5 $61.6 $ $75.1 $97.3 $ $135.5 $125.3 $ $168.5 $131.3 $ YTD $12.8 $7.8 $ YTD % Change YOY -26.9% -17.4% -23.9% 218 YTD % Change YOY -4.7% % -35.6% 218 Ann. $ $ $1,247.4 Sources: embs and Urban Institute. Note: Dollar amounts are in billions. Data as of January (Ann.) $153.2 $93.5 $