Fannie Mae March portfolio shrank a bit, delinquencies up

NEW YORK , April 30 - Fannie Mae <FNM.P><FNM.N>,the largest provider of funding for U.S. home mortgages, said on Thursday its mortgage investment portfolio shrank by an annualized 1.3 percent rate in March, while delinquencies on loans it guarantees accelerated.

The portfolio decreased to $783.9 billion, for an annualized 1.7 percent decrease year to date, the Washington-based company said in its monthly summary.

In March 2008, the portfolio was $722.8 billion.

Delinquency on loans in its single-family guarantee business jumped by 0.19 percentage point to 2.96 percent in February -- the most recent data available. A year earlier, it was 1.10 percent.

The multifamily delinquency rate also rose 0.05 percentage point to 0.32 percent in February. A year earlier, it was 0.10 percent.

Fannie Mae said March refinance volume increased to $77 billion, nearly twice the refinancing volume reported in February and its largest refinance month since 2003.

Refinance volumes will remain above historical norms in the near term, but may fluctuate from month to month, based on a number of market factors, the company said.

The company's total mortgage portfolio increased at a 4.3 percent annualized rate in March to $3.144 trillion.

Fannie Mae said it provided $93.3 billion in liquidity to the market through net retained commitments of $5.4 billion and $87.8 billion in mortgage-backed securities issuances.

Fannie Mae mortgage-backed securities and other guarantees grew at a compound annualized rate of 15.4 percent during the month, while issuance of mortgage-backed securities increased to $87.8 billion, driven largely by refinancing volume.

Liquidations increased to $57.0 billion, the company said.

On Sept. 7, 2008, the U.S. government seized control of Fannie Mae and its smaller sibling, Freddie Mac. The takeover came amid heightened worries about shrinking capital at the congressionally chartered companies.

The government is now relying heavily on Fannie Mae and Freddie Mac in its efforts to stimulate the U.S. housing market, which is in the midst of its worst downturn since the Great Depression, by buying more mortgage loans, easing refinancing and helping homeowners avoid going into foreclosure.