Fannie Mae portfolio, planned purchases up in Sept

NEW YORK (Reuters) - Fannie Mae (FNM.P), the largest provider of funding for U.S. home mortgages, said on Thursday its investment portfolio and planned purchases rose slightly in September, the month the government seized the company.

The mortgage portfolio balance increased to $761.4 billion last month from $759.98 billion in August, for a 2.3 percent annual rate, the Washington-based company said in a statement.

Commitments to purchase mortgages and securities in future months jumped to $43.76 billion from $25 billion, it said. But commitments it plans to retain increased by $5 billion to $9.03 billion, which is the low end of its historical range, Howard Shapiro, an analyst at Fox-Pitt Kelton Cochran Caronia Waller said in client note.

Intentions to purchase more mortgages came after the government took Fannie Mae and its rival Freddie Mac (FRE.P) into conservatorship in a bid to preserve their ability to support the market with purchases and mortgage bond programs. The Treasury and Federal Housing Finance Agency announced the move on Sept. 7.

But scant evidence that Fannie Mae and Freddie Mac are playing a bigger role in the market has since turned investors wary in October. Borrowing costs of their unsecured "federal agency" debt sold to fund purchases has soared to record levels after the government set a plan that investors say makes some bank debt more attractive.

The importance of purchases by the two companies has increased this year as the housing slump has begun to make U.S. growth shrink. The government on Thursday reported U.S. gross domestic product contracted 0.3 percent in the third quarter.

The average 30-year fixed mortgage rate in the last week jumped 0.42 percentage point to 6.46 percent, according to a Freddie Mac survey.

"With mortgage rates up, and up relative to Treasuries, it appears that plans to use the two GSEs to lower mortgage rates and boost demand have yet to materialize," Shapiro wrote.

Serious delinquency rates on loans guaranteed by Fannie Mae continued to accelerate. Total delinquencies increased to 1.57 percent in August, up from 1.45 percent in July and more than double those of a year earlier, Fannie Mae said.

(Reporting by Al Yoon; Editing by Andrea Ricci)