Fannie Mae acquired $48 billion in home mortgages in January, its lowest purchase volume in more than three years.Meanwhile, the company's on-balance-sheet portfolio fell to $890 billion at the end of January, which translates into an annualized growth rate of negative 16.8%. Fannie Mae, which is facing a $9 billion earnings restatement, is operating under the close scrutiny of its regulator, the Office of Federal Housing Enterprise Oversight. Last week its stock fell to a new 52-week low after Federal Reserve Chairman Alan Greenspan suggested that the company and its chief competitor, Freddie Mac, should be no larger than $200 billion. In a recent report, analyst Matt Vetto of Smith Barney predicted that Fannie's portfolio would grow in the "single-digit" range after 2005, adding that the company may face a "permanent" 20% to 30% capital surplus requirement. Smith Barney is maintaining a "buy" rating on the government-sponsored enterprise. Fannie Mae can be found online at http://www.fanniemae.com.

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