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Freddie Mac's business model does not require rapid portfolio growth, and its $710 billion portfolio should not be singled out by critics as a "special source of systemic risk," according to the company's president and chief executive, Richard Syron.Freddie Mac can expand its portfolio in line with the annual growth rate of mortgage debt outstanding (which is projected to be 8% over the next few years) and still be profitable, Mr. Syron told the Money Marketeers of New York University. "We are thus able to both serve our mission and generate shareholder value by growing along with a very healthy mortgage market," he said. He also stressed that Freddie has more ways to hedge its risks and that its portfolio is "less risky" than the large portfolios maintained by a handful of banks and thrifts. "I don't believe it makes sense to single us out as a special source of systemic risk," the Freddie Mac chief executive said.

Class B2 of DLJ Mortgage Acceptance Corp. residential mortgage pass-through certificate series 1996-QJ has been downgraded from BBB-plus to BB-plus by Fitch Ratings.Fitch also upgraded one class in each of two other DLJ deals and affirmed the ratings on 12 classes in eight DLJ deals. The rating agency attributed the downgrade to a deterioration of credit enhancement relative to consistent or rising monthly losses.

Class M-2 of Soundview Home Equity Loan Trust, series 2001-1, has been downgraded from B to CC by Fitch Ratings.Fitch also affirmed the ratings on two classes in the transaction. The downgrade was attributed to deterioration in the relationship between credit enhancement and loss expectations. "Overcollateralization has been entirely depleted, and the B class bond contains less than $300,000, while monthly realized losses have averaged approximately $90,000," the rating agency said. The mortgage pool consists of 15-, 20-, and 30-year fixed- and adjustable-rate mortgage loans, all of which were originated or acquired by Delta Funding Corp. Fitch can be found online at http://www.fitchratings.com.

The Federal Agricultural Mortgage Corp., Washington, has announced the issuance of a guarantee on $500 million of Guaranteed Notes.Farmer Mac said the notes are secured by an obligation of Metropolitan Life Insurance Co. that is, in turn, secured by Farmer-Mac-eligible agricultural real estate mortgage loans. Farmer Mac, a congressionally chartered corporation that provides a secondary market for rural housing and agriculture-related mortgage debt, said the guarantee stems from a diversification of marketing focus to include transactions that emphasize high asset quality and greater protection against adverse credit performance. The transaction brings the total outstanding volume of its guarantee program to $5.8 billion. The government-sponsored enterprise can be found on the Web at http://www.farmermac.com.

Thornburg Mortgage Inc., Santa Fe, N.M., has doubled the size of its asset-backed commercial paper facility to $10 billion, according to the company.Thornburg said the facility, established in June 2004, gives it an alternative way to finance its adjustable-rate mortgage-backed securities portfolio. Lehman Brothers Inc. is the structuring agent and lead dealer for the transaction. Thornburg can be found online at http://www.thornburgmortgage.com.

A "flood" of mortgage defaults can be expected in the storm-ravaged Gulf Coast region now that 90-day grace periods extended by many lenders have expired, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm.Alexis McGee, president of ForeclosureS.com, said work-out solutions to avoid defaults were available on a case-by-case basis, but that they had to be negotiated before Dec. 1. She warned that scam artists are a threat to homeowners in the region. "Crooked adjusters are urging people to file bogus insurance claims for a share of the proceeds," Ms. McGee said. "Inexperienced and unlicensed contractors are preying on people with damaged homes, demanding money up front and then disappearing without doing the work." The company can be found online at http://www.foreclosures.com.

RealtyTrac, an online foreclosure marketplace based in Irvine, Calif., has reported that 846,982 properties nationwide entered some stage of foreclosure in 2005, a 25% increase.The company's 2005 U.S. Foreclosure Market Report is based on the company's database of pre-foreclosure and foreclosure properties, which it says includes more than 550,000 properties in nearly 2,000 counties across the country. "Overall, U.S. foreclosure numbers climbed steadily over the course of the year, with more new foreclosures reported in every quarter," said James J. Saccacio, RealtyTrac's chief executive officer. "This trend appears to be moving the real estate foreclosure market back to its historic levels." The company said Florida had the nation's highest foreclosure rate and accounted for more than 14% of new foreclosures last year, despite a 29% decrease in new foreclosures in the state from the first quarter to the fourth. RealtyTrac can be found online at http://www.realtytrac.com.

Bank of America Corp., Charlotte, N.C., has reported net income of $16.89 billion ($4.15 per share) for 2005, up 19% from $14.14 billion ($3.69 per share) in 2004.Home equity production volume rose 27% to a record $72 billion, BoA said. For the fourth quarter, the company reported net income of $3.77 billion ($0.93 per share), down from $3.85 billion ($0.94 per share) a year earlier. The company can be found online at http://www.bankofamerica.com.

Friedman Billings Ramsey has downgraded Fannie Mae's stock to "underperform" because the giant mortgage company could be stuck with higher capital requirements and slower portfolio growth for two years.FBR analyst Paul Miller estimates that it could take Fannie "another two years" to become current in its financial reporting, while Freddie Mac is expected to become current by the end of this quarter. "For Fannie Mae, we believe portfolio growth will be limited to mid-single digits given continued restrictions on capital levels and management focus on restatement and becoming current in financial reporting," says a new FBR research paper. FBR reduced its 12-month price target for Fannie's stock to $44 from $65. At the same time, Mr. Miller increased the price target for Freddie's stock from $70 to $76, calling it an "outperform." The analyst said he expects Freddie's regulator to reduce its capital requirement in the first half of this year, which would allow for mid- to high-single-digit portfolio growth.

Issuance of U.S. private-label residential mortgage-backed securities will decline this year but remain strong enough to record the market's second-best year, Standard & Poor's Ratings Services is forecasting.S&P's forecast calls for private-label RMBS volume of as much as $900 billion in 2006, compared with a record $1.2 trillion in 2005. "The sector will experience generally strong rating performance, although increasing risks presented by the recent popularity of affordability products could contribute to deteriorating credit quality in the coming year," said S&P analysts Thomas Warrack and Ernestine Warner. Last year, the record RMBS issuance was led by the subprime sector's volume of $450 billion, while the alternative-A/B sector's volume doubled to more than $300 billion, S&P reported. The rating agency can be found online at http://www.standardandpoors.com.