May 25, 2010 / 2:00 PM / 7 years ago

UPDATE 1-Freddie Mac portfolio grows, delinquencies mixed

* Freddie’s total portfolio grows for first time in 2010

* Single-family delinquencies fall, multifamily edges up

NEW YORK, May 25 (Reuters) - Freddie Mac FRE.N, the No. 2 U.S. home finance agency, said on Tuesday its portfolio grew in April for the first time in 2010 after the Federal Reserve concluded its buying of mortgage securities in March.

The levels of home loans with late payments were mixed in April but remained above year-ago levels, suggesting persistent strain on home-owners due to high unemployment and a slow recovery of the real estate market, the company’s latest monthly portfolio data showed.

High loan delinquencies stress Freddie Mac’s capital and earnings. Earlier this month, the company said it had a net loss of $6.7 billion in the first quarter and asked for an additional $10.6 billion in government aid. [ID:nN05623395]

Freddie Mac’s total portfolio grew at a 3.0 percent annualized rate in April, compared with an annualized fall of 9.1 percent in March.

It was the first monthly increase since the 5.7 percent rise in December.

The Fed completed its $1.25 trillion program to buy mortgage-backed securities at the end of March. The U.S. central bank bought MBS and $175 billion in housing agency bonds to try to hold down home borrowing costs and stimulate the housing market.

Freddie Mac’s business activities in April, which include purchases and guarantee of mortgages, raised its portfolio to $2.231 trillion.

The company and its larger sibling Fannie Mae FNM.N have been buying back tens of billions of dollars in seriously delinquent loans from the pools of mortgages they guarantee.

Signs of weakness in the housing market came on Tuesday in the Standard & Poor‘s/Case Shiller home price indexes, which showed single-family home prices were unchanged in March from February but fell in the first quarter before federal aid for buyers expired at the end of April. [ID:nN25126468]

Despite its own financial woes, Freddie Mac’s role in the U.S. housing market has grown, as it has remained a key source of home financing and siphoned mortgages off the books of banks and investors.

The unpaid principal balance of Freddie Mac’s portfolio rose by about $3.9 billion in April to $757.3 billion. This was lower than the $830.3 billion a year earlier.

Delinquencies on single-family loans fell for a second straight month to 4.06 percent in April. This was lower than the 4.13 percent in March but above the 2.56 percent a year earlier.

Delinquencies on multifamily mortgages edged up to 0.25 percent from 0.24 percent in March and 0.12 percent a year ago, the data showed. (Reporting by Richard Leong; Editing by John O‘Callaghan)

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