Fannie Purchases Weak in August

Fannie Mae purchased $52 billion worth of loans in August, its second-worst showing of the year.According to a new analyst report issued by Bernstein Research, the weak showing was caused by a strong adjustable-rate mortgage market and a robust appetite for mortgages by depositories. In connection with the weak numbers, Bernstein slightly reduced its 2005 earnings estimate for Fannie. The research firm says it believes Fannie Mae is now losing market share. Bernstein analysts Jonathan Gray and Adam Weinrich also commented on media reports that the mortgage giant may have smoothed out earnings, saying, "as far as we are aware, the 'smoothing' has been one-sided, deferring, rather than accelerating, earnings recognition." They added: "The only question would appear to be whether accounting rules were violated." Fannie Mae can be found online at http://www.fanniemae.com.