Fannie Mae Reports Mortgage Delinquencies Increase In October 2008 Amidst Continued Housing Price Erosian

Delinquency rates on mortgages rose in October, according to a monthly update from mortgage provider Fannie Mae on Tuesday.

The proportion of borrowers that fell behind on mortgage payments climbed by 17 basis points in October, to 1.89%, from 1.72% in September, according to Fannie Mae’s November summary, which also said the serious delinquency rate on multifamily dwellings gained five basis points, to 0.21%, in October. Serious delinquencies represent a greater risk of default on a mortgage.

In September, the U.S. government took over mortgage financers Fannie Mae and Freddie Mac after staggering delinquencies.

Since Sept. 6, Fannie Mae has been under the conservatorship of the Federal Housing Finance Agency, which regulators had hoped would help shore up the weak housing market.

But the Fannie Mae report came on the heels of more bleak data for the housing sector. The Standard & Poor’s Case-Shiller index showed on Tuesday that the price of single-family homes in major metropolitan areas fell by a record drop of 18.0% in October from a year ago.

Also on Tuesday, Fannie Mae said the book of its business growth was largely flat, with a compound annualized growth rate of 0.2%, putting its year-to-date growth at 7.5% on a compound annualized basis.

The firm said its gross mortgage portfolio grew by 9.3%.