UPDATE: Freddie Commits To Buy $25.365 Billion In Mtge Bonds In Dec
January 23 2009 - 12:15PM
Dow Jones News
Freddie Mac (FRE) committed to buy $25.365 billion of mortgage
bonds in December.
The mortgage giant's total investment portfolio balance was at
$804.8 billion as of the end of 2008, more than $45 billion shy of
the $850 billion limit set by its regulator when the mortgage
finance giant was nationalized last September, according to a
monthly summary from the company. Freddie's portfolio was at
$720.81 billion as of December 2007.
Over the past couple of months, the role of Freddie and its
sibling Fannie Mae (FNM) in the mortgage market have diminished as
both the U.S. Treasury and the Federal Reserve have emerged as
backstop buyers with deep pockets.
The U.S. Treasury, so far, has bought nearly $75 billion of
agency mortgage-backed securities, while the central bank bought
$52.63 billion.
However, market participants still keep tabs on Fannie and
Freddie's portfolios as an indication of their financial health and
their ability to continue to play a role as both guarantors and
buyers of mortgage bonds.
Freddie's report also gave an indication of the extent of
decline among prime borrowers with conforming loans, as its
single-family delinquency rate continued to rise sharply. In
December, the rate rose to 1.72% from 1.52% in November, and 0.65%
at the end of 2007.
Meanwhile, Freddie's issuance of guaranteed securities and
pass-through certificates increased to $15.72 billion from $14.5
billion in November.
The mortgage giant's total mortgage portfolio grew 4.1% in
December and 5% for the year, to $2.21 trillion.
The duration gap, a measure of the portfolio's sensitivity to
interest rates, averaged one month in December.
-By Prabha Natarajan, Dow Jones Newswires, 201-938-5071;
prabha.natarajan@dowjones.com
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