Fannie Mae's mortgage portfolio may be stabilizing after declining by over $200 billion, or 22.6%, over the 12 months ended in November.The government-sponsored enterprise reported that its giant portfolio had declined to $715.5 billion in November, down from $912.6 billion in November 2004. Freddie Mac, which used to be Fannie's smaller brother, now has a $692.7 billion portfolio. Freddie reported on Dec. 22 that its mortgage portfolio has grown at a 6.7% annual rate so far this year. However, Fannie is beginning to shift gears, and its portfolio shrank by only a 2.6% annual rate in November, compared with 16.1% in October. In September, Fannie sold $32.1 billion in assets as it struggled to achieve a 30% capital surplus mandated by its regulator. In November, Fannie sold only $2.5 billion in assets, and purchases totaled $16.0 billion. Freddie reported $32.6 billion in purchases during November. The GSEs can be found online at http://www.fanniemae.com and http://www.freddiemac.com.

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