Freddie, Freddie See Retained Portfolios Surge in April
As legislators and regulators look to both Fannie Mae (FNM) and Freddie Mac (FRE) to prop up an ailing U.S. housing and mortgage market, both GSEs ramped up their portfolio purchases dramatically in April as wide MBS spreads in March led each to bulk up on holdings of their own securities. Freddie Mac saw its retained portfolio soar to a record $737.54 billion in April -- even making the rare run past sister GSE Fannie Mae, which saw its portfolio grow to $728.41 billion. Freddie has been on a veritable tear in mortgage purchases during 2008, buying more than $100 billion during the first four months of the year; the GSE's net portfolio commitments hit $43.49 billion in April alone, with retained purchases increasing to $36.89 billion from $18.6 billion in March. Fannie's net retained commitments rose dramatically as well, to $30.66 billion -- but not enough to keep up with the torrid pace being set by Freddie Mac. Most of the purchases are in the form of the agencies' own securities, however, and not in the form of mortgages or so-called private-party MBS -- so while the GSEs are aiding liquidity in the conforming market, they're not exactly jumping in and soaking up risk in other sectors of the mortgage market. Wide agency MBS spreads in March created an attractive purchasing environment for both GSEs, as well, sources told Housing Wire on Friday. Freddie Mac, for example, continued to run off its portfolio of private-party MBS, which fell to $218.96 billion in April from $244.62 billion one year ago; purchases of its own securities led to a jump of $28.35 billion in Freddie-backed MBS between March and April alone. Despite bulking up their portfolio holdings, both Fannie and Freddie are continuing to see credit quality worsen. Fannie Mae reported that serious delinquency rates in its single-family mortgage portfolio rose to 1.15 percent in April, up 5 basis points from one month ago and nearly double year-ago levels. Freddie, in comparison, saw severe delinquencies rise to 0.77 percent, up 3 basis points and just under doubling year-ago totals. For more information, visit http://www.fanniemae.com and http://www.freddiemac.com. Disclosure: The author held no positions in FNM or FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.