Freddie Mac's April volume summary reported weak portfolio growth. The GSE's mortgage portfolio dipped at an annualized rate of 11.6% in April, while, year-to-date, the total mortgage portfolio has dropped at an annualized rate of 3.8%.
Meanwhile, Freddie's retained portfolio declined at a 1.2% annualized rate in April and year-to-date, the retained mortgage portfolio has increased at an annualized rate of 0.4%. Freddie reported that purchase commitments for the retained portfolio reached $25.2 billion at the end of April, down from $32.3 billion at the end of March.
Wachovia Securities said in a recent report that both the retained mortgage and PC portfolios are still being affected by a high rate of liquidations, which is not likely to ramp up until the GSE observes a widening of mortgage-to-debt spreads.
In terms of its PC portfolio, it decreased at a 21.3% annualized rate in April and has dropped at an annualized rate of 7.8% year-to-date. This is compared to rival Fannie Mae's 41.7% growth year-to-date.
Freddie's gross issuance has totaled $200.8 billion year-to-date, which has been offset by $228.9 billion in liquidations. This has resulted in a net reduction in PCs of $28.1 billion. Fannie, on the other hand, reported $300 billion in new outstanding MBS but with liquidations of only $175 billion, resulting in net new outstanding MBS of $125 billion.
Because of its declining market share against rival Fannie, Freddie has actively addressed prepayment concerns on its collateral (see related story, p. 17).