Fannie Mae reported significantly slower, 2.1% annualized growth in the firm's gross mortgage portfolio, totaling $892.7 billion. This is versus June that saw a 19% annualized growth. Analysts attribute the slowing portfolio growth to tight spreads in mortgages as well as considerably less triple-A floater purchases.

"Growth in the mortgage portfolio was consistent with guidance that mortgage to debt spreads continue to be tight and that growth would likely be driven more by lower liquidations during 2H04," said Prudential Equity Group, LLC.

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