Freddie Mac reports lower mortgage delinquency rate

Sales of foreclosed homes continue to make up a significant portion of sales of Freddie Mac-backed mortgages, but fewer homes are entering foreclosure

August 09, 2011

Freddie Mac's REO inventory continued to go down in the second quarter, with a near-record number sold and the delinquency rate declining.

In its second quarter report to investors, Freddie reported that its single-family delinquency rate had dropped from 3.63 percent at the end of the first quarter to 3.5 percent at the end of the second quarter. The government-backed company also reported 29,000 REO sales for the quarter compared to less than 25,000 REO acquisitions.

Freddie Mac CEO Charles E. Haldeman Jr. said that low mortgage rates helped to encourage home sales in the first half of the year, but that underlying concerns about the economy and the job market will continue to challenge the industry.

"Labor market weakness and households' worries about their financial security dampened home sales during the quarter," he said. "While we expect some improvement in home sales during the second half of the year, our outlook for the single-family housing market remains cautious."

Freddie Mac also reported that it had helped nearly 54,000 homeowners avoid foreclosure in the second quarter through loan modifications, short sales and other solutions.

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