Mortgage giant and government-sponsored enterprise Fannie Mae (FNM) in May took on more refinanced mortgages as part of a federal program, raising its refi volume to $57bn, as its delinquency rate rose to more than double the year-ago level. In April, the GSE began accepting refinanced mortgage originations under the Making Home Affordable Program (MHA Program). "We expect that our refinance volumes will remain above historical norms in the near term, but may fluctuate from month to month based on a number of market factors," Fannie said in its monthly summary. "We expect that the MHA Program will bolster refinance volumes over time as major lenders adopt necessary system changes and consumer awareness continues to build." Until then, however, the delinquency rate among Fannie's loans looks likely to continue to increase as it has every month in the last year. The rate of "serious" delinquencies among Fannie's single-family loans rose 27 bps to 3.42% at the end of April and is up from 1.22% a year earlier. Despite the rising delinquency rate, Fannie continues to provide the market with liquidity, issuing $67.7bn of mortgage-backed securities in the month, including the securitization of $61.4bn of whole loans held for investment. According to a Bank of America analyst, this trend of high-volume securitization enforces a trend seen in May when issuance volumes began increasing, to the industry's surprise. "[T]his report further confirms the securitization of seasoned mortgage loans by Fannie Mae starting in May," says the analyst. "Their mortgage loan (unsecuritized) holdings declined by $59bn while their MBS holdings increased by $80bn in May." 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.