Freddie Mac's (FRE) total mortgage portfolio decreased at an annualized rate of 1.6% in May.

The company said its refinance-loan purchase volume stood at $40.3 billion in May, down from $43.3 billion in April.

Freddie said its delinquency rate rose to 2.62% in May, versus 2.44% in April.

Delinquency rates continue to rise to record highs for the mortgage-finance giant and are an indication of the extent of decline among prime borrowers with conforming loans.

The delinquency rate was at 0.65% at the end of 2007.

Freddie's total investment portfolio in May was at $823.4 billion, down from $830.29 billion in April.

Over the past couple of months, the role of Freddie and its sibling Fannie Mae (FNM) have diminished in the mortgage market as both the U.S. Treasury and the Federal Reserve have emerged as backstop buyers with deep pockets.

-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227; anusha.shrivastava@dowjones.com