| NEW YORK, July 23
NEW YORK, July 23 Freddie Mac, the second-
largest buyer of U.S. residential home loans, said on Friday
that it shrank its mortgage investment portfolio in June as it
has for four of the first six months of the year.
The delinquency rate on loans that Freddie Mac FMCC.OB
guarantees remained elevated, but improved for both
single-family and multi-family loans last month, the company
said in its monthly summary.
Earlier this year, Freddie Mac bought back the bulk of its
seriously delinquent single-family loans from its securities
trusts, aiming to stem the drain on its capital and capping
the delinquency rate.
The company reduced its mortgage-related investments
portfolio by an annual 13.8 percent rate, or by $8.6 billion,
in June to $739.5 billion.
The holdings, a key concern of many lawmakers citing
concentrated risk at both Freddie Mac and its larger
counterpart Fannie Mae FNMA.OB, have fallen from $755.3
billion at the end of 2009 and from $829.8 billion a year
"We have been in a low-growth mode in our retained
portfolio for much of this year, with most of the growth in
portfolio related to purchase of seriously delinquent loans
from pools backing our PC securities," Freddie Mac spokesman
Michael Cosgrove said.
Purchases into the portfolio were about $9.5 billion in
June, up from $7.7 billion in May, mostly driven by Freddie
Mac's ongoing purchase of delinquent loans, he said.
The two companies, which went into conservatorship in
September 2008, and are relied upon heavily to foster mortgage
activity as private lending evaporated. Freddie Mac and Fannie
Mae have borrowed a combined $145 billion in federal aid and
have an open checkbook with the Treasury Department through
Freddie Mac's total mortgage portfolio fell at an annual
rate of 0.9 percent in June to $2.22 trillion, having ended
2009 at $2.25 trillion.
The pace of late payments on single-family Freddie Mac
loans improved in June to 3.96 percent from 4.06 percent in
May and from a peak this year of 4.20 percent in February. But
a year ago, the rate was 2.89 percent.
"Since we include loans in the HAMP trial period as
delinquent in our statistical reporting, this results in a
temporary rise in our delinquency rate until the modifications
become effective and are removed from delinquent status,"
Delinquencies on multifamily loans dipped to 0.28 percent
in June from 0.32 percent in May, the year's high, and remain
well above 0.16 percent a year ago.
Freddie Mac and Fannie Mae buy loans from banks, package
them for sale to investors or hold in their own portfolios.
(Reporting by Lynn Adler; Editing by Jan Paschal)