Freddie Growing Mortgage Portfolio

Freddie Mac is moving ahead with plans to grow its $664.5 billion mortgage portfolio even though Congress is considering ways to cut or slow its growth.Rep. Richard Baker, R-La., is expected to unveil a GSE bill (possibly on April 5) that will require Freddie and Fannie Mae to reduce their mortgage holdings over time. Nevertheless, Freddie executive vice president Patricia Cook told investors and analysts that recent changes in interest rates are "likely to present an opportunity to grow the portfolio a little quicker than in 2004." Long-term, Freddie expects portfolio growth will stay in line with the overall growth of mortgage debt outstanding, she said during a conference call on the company's 2004 financial results. At the same time, Freddie is expanding its loan purchases to serve "all segments of originations," chief operating officer Eugene McQuade said. This means the government-sponsored enterprise will purchase more subprime products for its retained portfolio or for securitization. Through the guarantee business and capital markets operation, Freddie wants to "buy the market and distribute the risk," Mr. McQuade said.