Freddie Mac’s Portfolio Grows Slightly in May, Still Shrinking Overall

Increases in all aspects of Freddie Mac's total mortgage portfolio led to a higher (but still negative) annualized growth rate, according to the GSE's ""Monthly Volume Summary"":http://www.freddiemac.com/investors/volsum/pdf/0512mvs.pdf for May.

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The summary showed that Freddie Mac's total mortgage portfolio for the month shrank at an annualized rate of 9.4 percent, a drop from 14.1 percent in April but still far above March's 2.9 percent contraction rate. The negative annualized growth rate YTD is 6.8 percent.

The different contributors to the total portfolio all saw increases in May: Purchases and issuances increased nearly $5 billion, while sales and liquidations increased approximately $1.3 billion and $2 billion, respectively. Values of sales and liquidations are both in the negative. However, further increases could bring sales values into positive numbers in the coming months.

While purchases/issuances and sales both increased year-over-year, liquidations dropped immensely-negative $45.4 billion compared to negative $26.7 billion in May 2011.

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The balance for May's total mortgage portfolio was $2.02 trillion, a relatively small decrease from April's $2.03 trillion but down year-over-year quite a bit from $2.13 trillion.

Freddie Mac's mortgage-related investments portfolio also saw some growth, showing an annualized growth rate of negative 19 percent and bringing the YTD rate up to negative 22.5 percent (compared to April's negative 23.8 percent). May 2011 was the last month to date which saw a positive annualized growth rate (5 percent).

The growth in the portfolio seems largely to have come from a major increase in mortgage-related purchases, which shot up from $1.8 billion in April to $6.8 billion in May. The aggregate unpaid balance was approximately $9.5 billion.

Though purchases and sales led to the mortgage-related investments' growth, the ending balance still fell nearly $10 billion from April. The balance for May was approximately $592 billion.

Mortgage-related securities and other guarantee commitments shrank in May at an increased rate of 9.7 percent, continuing a drop that started in April. This decrease was triggered by a further drop in issuances from approximately $32 billion in April to $28.9 billion in May.

Single-family refinance-loan purchases and guarantee volume was $22.1 billion, representing 72 percent of total mortgage portfolio purchase and issuances.

The single-family seriously delinquent (90-plus days) rate decreased slightly to 3.50 percent in May (from 3.51 percent in April) while the multifamily delinquency rate increased to 0.26 percent (from 0.25 percent a month before).

The GSE's total number of loan modifications in May was 5,091, bringing the YTD total to 22,222.