Fannie Mae purchased about $79 billion in interest-only mortgages from lenders in 2006 and Freddie Mac purchased about $56 billion, according to a report by the Office of Federal Housing Enterprise Oversight.Both secondary-market agencies increased their purchases of IOs last year. OFHEO said 15% of Fannie's single-family loan purchases were IOs, compared with 10% in 2005. Freddie Mac sharply increased its IO purchases to 16% of single-family loan purchases, up from 6% in 2005. The OFHEO report says about one-eighth of Freddie's purchases were fixed-rate IOs and the rest were IO hybrid adjustable-rate mortgages.

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