Fannie MBS Issuances Up

Fannie Mae issued $56.1 billion in mortgage-backed securities in July, up slightly from the previous month, according to the mortgage giant's monthly report.The secondary market agency has issued over $50 billion in guaranteed MBS over the three previous months and its securitization business grew at a compound annual rate of 15.5% during the month. In July 2006, the company issued $35.7 billion in guaranteed MBS. Meanwhile, Fannie purchased $21.2 billion in assets for its $730 billion mortgage portfolio last month, but it is constrained from being a more aggressive buyer. Fannie's regulator has refused to increase a cap on its $730 billion mortgage portfolio, despite demands from congressional Democratic leaders who believe lifting the cap would provide much needed liquidity for the mortgage markets. In its monthly report, Fannie notes that "option-adjusted spreads have continued to widen" in August.