While mortgage giant and government-sponsored enterprise Freddie Mac (FRE) saw 2.62% of its single-family mortgages seriously delinquent in May, its refinance-loan purchases dropped 7% from the month before. Freddie's total mortgage portfolio decreased at a 1.6% annualized rate in May, according to a volume summary released today. The aggregate unpaid principal balance of its mortgage-related investments portfolio fell to $823.4bn as of May 31. The volume of mortgage purchase and sales agreements entered during the month by its mortgage-related investments portfolio totaled $5.3bn, up more than 450% from $956m in April. The ratio of seriously delinquent mortgages at Freddie continues to increase every month this year; 2.62% of Freddie's single-family mortgages were 90 or more days delinquent in May, up from 2.44% in April and 176 bps above the 0.86% rate seen at the same time last year. Meanwhile, the rate of serious delinquencies among multifamily mortgages also continued to rise. In 2009 alone, the multifamily 90 plus day delinquency rate quadrupled from 0.03% in January to 0.12% in May. Freddie's refinance-loan purchase volume totaled $40.3bn in the month, down almost 7% from $43.3bn in April despite publicized refinance programs. As of June 5, Freddie announced it would alter the terms of its Relief Refinance Mortgage program to allow greater flexibility in financing closing costs. Freddie said it would allow the lesser of either 4% of the new refinance mortgage or $5,000 of closing costs, financing costs and escrows to be rolled into the new refinance mortgage. The move might encourage more borrowers to use the program and as a result boost the refinance purchase volumes in coming monthly summaries, along with another effort to increase consumers' reach to refinancing options through the administration's Making Home Affordable Program. Currently, the program applies to borrowers with mortgages worth up to 105% of the market value of their homes and whose mortgages are owned or guaranteed by Freddie Mac or Fannie Mae (FNM). Federal Housing Finance Agency director James Lockhart, in a press conference last week, acknowledged the administration is considering expanding the loan-to-value range to cover borrowers with more than 105% LTV, although he would give no exact figure for the new LTV target. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.