Fannie Mae reported an additional $20 billion decrease in its retained portfolio in August, with another dip expected for September. After this, Fannie could likely stop reducing its mortgage holdings as it is expected to exceed the capital surplus target set for Sept. 30 by the Office of Federal Housing Enterprise Oversight. This, combined with Freddie Mac's growing mortgage portfolio reported Sept. 23, is good news for the mortgage market.
Year-to-date, Fannie's retained portfolio has been reduced by $136 billion. David Montano, head of mortgage research at JPMorgan Securities, said that he believed Fannie was on target to exceed its capital surplus target last week, citing Fannie's reported retained commitments that reached an all time low of $20.9 billion. Some of these sales, however, might have settled and could reflect under both the retained commitment and the portfolio sales categories for August.