GSE Loan Purchases Up, Portfolios Down

Loan purchases by Fannie Mae and Freddie Mac rose in November but their retained portfolios continued to shed assets.Fannie Mae purchased $63.7 billion in mortgages during the month, a 28% rise from the level recorded a year earlier. Freddie's purchases rose a more modest 8%, to $41.4 billion. At the end of November Fannie held $722 billion in mortgages, a 1.4% decline from the level on Oct. 31. Freddie's holdings fell 0.3%, to $701.3 billion. In a research note, Credit Suisse said, "Freddie disclosed that wider spreads on mortgage products adversely affected the fair value of its common equity during November." Credit Suisse has an "underperform" rating on Freddie and a price target of $22, which is $8 below its current trading value. Fannie can be found online at http://www.fanniemae.com, and Freddie can be found at http://www.freddiemac.com.