October 30, 2009 / 8:34 PM / 10 years ago

Fannie Mae Aug delinquencies jump

NEW YORK (Reuters) - Fannie Mae FNM.P FNM.N, the largest provider of funding for U.S. home mortgages, said on Friday that delinquencies on loans it guarantees accelerated in August, while its mortgage investment portfolio grew in September from the previous month.

The delinquency rate on loans in its single-family guarantee business rose 0.28 percentage point to 4.45 percent in August, the most recent data available. That was well above the rate a year earlier when it was 1.57 percent.

The multifamily delinquency rate was unchanged at 0.56 percent in August, but a year earlier, it was 0.16 percent.

For September, Fannie’s mortgage investment portfolio grew by an annualized 22.4 percent rate, totaling $792.7 billion, for an annualized 0.9 percent increase in the year-to-date, the Washington, D.C.-based company said in its monthly summary.

In September 2008, the portfolio was $761.4 billion.

The company’s total mortgage portfolio increased at a 5.2 percent annualized rate in September to $3.243 trillion, for an annualized 5.7 percent increase year to date.

Fannie Mae said it provided $67 billion in liquidity to the market through net retained commitments of $7.8 billion and $59.2 billion in mortgage-backed securities issuances.

Fannie Mae mortgage-backed securities and other guarantees grew at a compound annualized rate of 6.9 percent during the month to $2.821 trillion, for an annualized 10.8 percent increase year to date.

Issuance of mortgage-backed securities decreased to $59.2 billion from $62.1 billion the previous month.

Liquidations decreased to $44.6 billion, the company said.

In early September 2008, the U.S. government seized control of Fannie Mae and its smaller rival, Freddie Mac FRE.P FRE.N, amid heightened worries about shrinking capital at the congressionally chartered companies.

The current agreement with the U.S. Treasury has the retained portfolios at Fannie Mae and Freddie Mac capped at $900 billion until December 31, 2009 when they are to start declining by 10 percent per year until they reach $250 billion.

The government has been relying heavily upon Fannie and Freddie in its efforts to stimulate the U.S. housing market by buying more mortgage loans, easing refinancing and helping homeowners avoid foreclosure.

After suffering the worst downturn since the Great Depression, the hard-hit U.S. housing market has been showing signs of stabilization.

Home price declines have moderated in many regions of the country. In fact home prices have risen in some regions, according to some indexes.

Reporting by Julie Haviv

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