Understanding Delinquent Loans
The Federal National Mortgage Association, known as Fannie Mae, has published performance data for 700,000 single-family loans modified due to delinquency between January 1, 2010 and December 21, 2015. When a borrower is unable to fully repay his or her loan under the initially agreed-upon terms, the lending institution can modify the loan to ensure eventual repayment, such as by lowering the interest rate or extending the length of the loan’s terms. Fannie Mae’s dataset includes current loans, delinquent loans, and loans fully paid off after modification. Fannie Mae published the data to help investors better understand the performance of the agency’s mortgage-backed securities.