Freddie Mac is finding attractive pricing on adjustable-rate mortgages, including interest-only loans, according to the company's top investment officer, Patricia Cook."Agency and triple-A-rated nonagency ARM products currently represent an increasing percentage of our total purchases" for the retained mortgage portfolio, the executive vice president for investments said. "These products provide attractive risk-adjusted returns." Ms. Cook made her remarks in response to questions during a teleconference in which top Freddie executives briefed analysts and investors on the company's business outlook. On the investment side, "we permit IO mortgages to be included as collateral backing nonagency triple-A securities in which we invest," she said. Meanwhile, growth of the retained portfolio slowed to a 3.1% annual rate in September. Freddie executives estimate the growth rate for the year will be in the low to middle single digits.

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