NEW YORK, June 29 (Reuters) - Fannie Mae, the largest provider of funding for U.S. home mortgages, on Tuesday said its mortgage investment portfolio grew in May and delinquencies on loans it guarantees slowed significantly the month prior.
The delinquency rate fell as the company continued to repurchase loans that were at least 120 days late, which increased its mortgage holdings for the third month.
Fannie Mae's portfolio increased by an annualized 43.6 percent rate to $813.7 billion in May from $789.5 billion the previous month, the Washington-based company said in its monthly summary.
For the year, the holdings are up 13.3 percent after shrinking 1.9 percent in 2009. In May 2009, the portfolio totaled $789.6 billion.
Delinquency on loans in its single-family guarantee business dropped by 0.17 percentage point to 5.30 percent in April -- the most recent data available. It was 3.42 percent a year earlier.
The multifamily delinquency rate fell 0.01 of a percentage point to 0.78 percent in April. A year earlier it was 0.36 percent.
Delinquencies increase stress on the company's capital.
Fannie Mae said it repurchased approximately $49 billion in loans from its mortgage-backed securities trusts in May that will not be reflected as liquidated from MBS until June.
Excluding the buyouts, the total book of business would have dropped by 3.8 percent in May. Including them, the company's total mortgage portfolio decreased at a 2.7 percent annualized rate in May to $3.251 trillion.
Fannie Mae and Freddie Mac have been buying back tens of billions of dollars in troubled home loans that back their mortgage-backed securities. The repurchased loans are at least 120 days late.
In early September 2008, the U.S. government seized control of Fannie Mae and its smaller sibling, Freddie Mac, as fears grew about shrinking capital at the congressionally chartered companies.
Fannie Mae and Freddie Mac now have open credit access from the Treasury through 2012,
Under this conservatorship they have received $145 billion of U.S. capital injections. The U.S. has directed each of them need to keep their portfolios below $900 billion.
The government has been relying heavily on Fannie Mae and Freddie Mac in its efforts to stimulate the battered U.S. housing market by buying more mortgage loans, easing refinancing and helping homeowners avoid foreclosure.
The lowest mortgage rates in decades and high affordability, helped the housing market find some footing in 2009 after a three-year slump. Recent data on home sales, however, point to a sector that has hit a lull in the absence of government support.
After the worst downturn since the Great Depression, the housing market remains highly vulnerable to setbacks.
Any improvement in the housing market would bode well for the U.S. economy, as it points to better demand in the sector where the first signs of the latest recession took root.
(Reporting by Julie Haviv; Editing by Andrew Hay) Keywords: USA FANNIE PORTFOLIO (Reuters Messaging:julie.haviv.reuters.com@reuters.net; e-mail: julie.haviv@thomsonreuters.com; +1-646-223-6153) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The delinquency rate fell as the company continued to repurchase loans that were at least 120 days late, which increased its mortgage holdings for the third month.
Fannie Mae's portfolio increased by an annualized 43.6 percent rate to $813.7 billion in May from $789.5 billion the previous month, the Washington-based company said in its monthly summary.
For the year, the holdings are up 13.3 percent after shrinking 1.9 percent in 2009. In May 2009, the portfolio totaled $789.6 billion.
Delinquency on loans in its single-family guarantee business dropped by 0.17 percentage point to 5.30 percent in April -- the most recent data available. It was 3.42 percent a year earlier.
The multifamily delinquency rate fell 0.01 of a percentage point to 0.78 percent in April. A year earlier it was 0.36 percent.
Delinquencies increase stress on the company's capital.
Fannie Mae said it repurchased approximately $49 billion in loans from its mortgage-backed securities trusts in May that will not be reflected as liquidated from MBS until June.
Excluding the buyouts, the total book of business would have dropped by 3.8 percent in May. Including them, the company's total mortgage portfolio decreased at a 2.7 percent annualized rate in May to $3.251 trillion.
Fannie Mae and Freddie Mac have been buying back tens of billions of dollars in troubled home loans that back their mortgage-backed securities. The repurchased loans are at least 120 days late.
In early September 2008, the U.S. government seized control of Fannie Mae and its smaller sibling, Freddie Mac, as fears grew about shrinking capital at the congressionally chartered companies.
Fannie Mae and Freddie Mac now have open credit access from the Treasury through 2012,
Under this conservatorship they have received $145 billion of U.S. capital injections. The U.S. has directed each of them need to keep their portfolios below $900 billion.
The government has been relying heavily on Fannie Mae and Freddie Mac in its efforts to stimulate the battered U.S. housing market by buying more mortgage loans, easing refinancing and helping homeowners avoid foreclosure.
The lowest mortgage rates in decades and high affordability, helped the housing market find some footing in 2009 after a three-year slump. Recent data on home sales, however, point to a sector that has hit a lull in the absence of government support.
After the worst downturn since the Great Depression, the housing market remains highly vulnerable to setbacks.
Any improvement in the housing market would bode well for the U.S. economy, as it points to better demand in the sector where the first signs of the latest recession took root.
(Reporting by Julie Haviv; Editing by Andrew Hay) Keywords: USA FANNIE PORTFOLIO (Reuters Messaging:julie.haviv.reuters.com@reuters.net; e-mail: julie.haviv@thomsonreuters.com; +1-646-223-6153) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.