Late Payments Fall at Freddie: First Decline Since April 2007

Late payments on Freddie Mac-guaranteed mortgages fell to 4.17% in March, the first monthly decline in almost two years and a sign that real estate conditions might finally be improving. A spokesman for the GSE told National Mortgage News that an "uptick in completed loan modifications" and rising short sales were the chief reasons for the improvement. Delinquencies on Freddie's book of business declined 7 basis points from February. A year ago late payments totaled a more benign 2.41%. Even though loan performance improved, secondary market purchases by Freddie from seller/servicers increased slightly to $31 billion in March from February. However, compared to March 2009, loan acquisitions fell by 64%. Based on the first-quarter run-rate, Freddie will buy $384 billion this year compared to $548 billion the year before.