Freddie Mac said its total portfolio of loans and guaranteed loans grew at an annualized rate of 13.2% in January.However, Freddie Mac's retained portfolio decreased at a 9.9% annualized rate in January, leaving the guaranteed portfolio to make up the growth. Retained portfolio purchases totaled $12.4 billion in January, down from $36.2 billion in December of 2005. Total guaranteed participation certificates increased at an annualized rate of 17.1%. Earlier this month, Freddie Mac president and COO Eugene McQuade predicted that a flat yield curve would create opportunities for Freddie Mac to increase its portfolio by making fixed-rate mortgages more popular than adjustable rate products with consumers and by making residential mortgages a less attractive asset for banks to hold. "While we have yet to see a sell off of fixed-rate mortgages from bank portfolios, even slightly reduced investment by banks should create better fixed-rate buying opportunities for us in 2006," Mr. McQuade said.

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