Fannie Mae delinquencies jump; portfolio up 1 pct

NEW YORK (Reuters) - Fannie Mae FNM.N, the largest provider of funding for U.S. home mortgages, on Monday said its portfolio edged higher in February while delinquencies jumped in the prior month to more than a decade high.

The government-sponsored enterprise said its mortgage investments increased $594 million to $721.6 billion in February, representing a 1 percent annualized growth rate.

Delinquencies on Fannie Mae's single-family home financing business rose in January to 1.06 percent, the highest since at least 1997. The rate increased from 0.98 percent in December.

Higher credit risks are the main stumbling block for Fannie Mae and rival Freddie Mac as regulators and lawmakers urge the GSEs to boost their roles in stabilizing financial markets.

Erosion in housing and mortgage markets last month prompted Fannie Mae to boost expectations for credit losses in 2008 as it reported a $3.6 billion loss for the fourth quarter.

A federal regulator last week eased capital requirements on the GSES in a move that it said would allow the companies to increase mortgage and mortgage bond purchases by $200 billion.

Fannie Mae's business of guaranteeing payments on mortgage-backed securities it issues grew at a torrid pace in February. The company said it issued $69.4 billion in the securities in the month, marking a 21.4 percent annualized growth rate.

(Reporting by Al Yoon, editing by Walker Simon)