Mortgage finance company Fannie Mae (FNM) released monthly volume summary for the month of April on Friday, reporting that gross mortgage portfolio grew at an annualized rate of 9.8%. Meanwhile, Freddie Mac (FRE) issued monthly volume summary for April, reporting 4.7% growth in its total mortgage portfolio at an annualized rate. The increase in mortgage portfolio at both the companies came after regulators eased capital constraints last month.
The OFHEO announced in March that it would reduce the surplus capital requirement for Fannie Mae and Freddie Mac to 20% from 30% and consider further cuts in future. The OFHEO's move was aimed at providing stability to the struggling U.S. mortgage and housing markets and increased the purchasing power of the Government sponsored Enterprises by $200 billion.
Both Freddie Mac and Fannie Mae are the biggest guarantors of home loans in the U.S. The two companies were formed by the U.S. Congress to boost homeownership, make profit by holding mortgages and mortgage bonds as investments and by charging a fee to guarantee and package loans as securities. Together, they own or guarantee at least 40% of the $11.5 trillion in U.S. residential-mortgage debt outstanding.
The aggregate unpaid principal balance of Freddie Mac's retained portfolio at the end of April increased to $737.5 billion from the previous month. Freddie Mac's amount of retained portfolio mortgage purchase and sales agreements entered into during the month of April totaled $43.5 billion, essentially unchanged from March.
In April, Freddie Mac entered into contracts to buy loans worth $40.78 billion, lower than the in preceding month. Freddie Mac's total Guaranteed Participation Certificates, or PCs, and Structured Securities issued have increased at an annualized rate of 7.8% in April and 9.8% year-to-date.
However, delinquencies on loans backed by Freddie Mac continued to rise. The company's single-family delinquency rate for all loans increased in March from February.
Meanwhile, Fannie Mae's gross mortgage portfolio increased to $728.41 billion in April, while its net retained commitments rose to $30.7 billion. The company made $17.9 billion in new purchases in the month, up from the preceding month. The company said delinquency rates on single-family homes increased to 1.15% in March from 1.10% in the prior month.
Earlier on Friday, the National Association of Realtors released its report on existing home sales for the month of April. The report showed that existing home sales declined 1.0% to an annual rate of 4.89 million units in April from an upwardly revised pace of 4.94 million in March. With the decrease, existing home sales in April were down 17.5% compared to the same month last year.
U.S. home foreclosure filings edged up in April from March and came in 65% higher than the year before, according to data from foreclosure-listing service RealtyTrac. In addition to rise in foreclosure filings, April saw bank repossessions jump 145% to 54,574 in April from a year ago.
In Friday's regular trading session, FRE is trading at $25.89 0.40 1.52% on a volume pf 3.07 million shares. In the 52-week period, the stock has been trading in a range of $16.59-$68.12.
FNM is trading at $28.04, up $0.14 or 0.50% on a volume of 4.65 million shares. The stock has been trading in a range of $18.25-$70.57 in the past 52 weeks.
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