March Purchases Spike at Fannie Mae

Fannie Mae purchased $83 billion of mortgages during March, a 55% increase from the prior month. Compared to the same period a year ago, the government-controlled entity saw acquisitions fall by 11%. The $83 billion it purchased was its best month since last July. (Like everyone else in the mortgage business, Fannie benefited from the expiring federal tax credit for new homeowners.) During the first three months of the year, Fannie bought $191 billion in mortgages, giving it an annual run-rate of $764 billion. Last year it purchased $823 billion in mortgages but 2009 was a stronger year for loan production. Meanwhile, new figures show that homeowners who refinanced during the first quarter again overwhelmingly chose fixed-rate loans, regardless of whether their original loan had a fixed or adjustable rate. Also, shorter-term mortgages gained some favor, according to research conducted by Freddie Mac. More than 95% of refinanced loans during the quarter were FRMs, as interest rates remained historically low. According to the Quarterly Data Report, a National Mortgage News publication, FRMs accounted for 90% of all originations in the third and fourth quarters of last year.