The mortgage portfolio for Fannie Mae ballooned during July, the company said.
The $836.1 million portfolio grew by an annualized rate of 41.1 percent, according to the seondary lender's monthly summary. Portfolio growth overall is averaging 10 percent on an annualized basis so far in 2003, Fannie said.
The growth explosion comes on the heels of an actual shrinking of the portfolio in June.
In the statement, Fannie reported outstanding mortgage-backed securities of $1.25 trillion. The company's book of business totaled $2.085 trillion.
Fannie reported its highest business volume ever for any month in July, $144.1 billion. June's volume was $142.4 billion and August of 2002 had $59.2 billion.
For three straight months, retained commitments have broken previous records, the company said. For July, they were valued at $77.7 billion. Outstanding commitments rose as well, closing July at $139 billion.
On an annualized rate, the company said liquidations were 70 percent for the month, compared to 32 percent last August and 61 percent in June.
"The company's disciplined growth strategies resulted in solid business performance in a period of historic volatility, which included the largest change in mortgage rates over the course of one month since 1987," said Jayne Shontell, senior vice president for investor relations, in the summary.
The duration gap for July was 6, up from negative one in June, and the single-family conventional loan deliquency rate was 0.56 percent, one basis point higher than the prior month.
The Wall Street Journal said in an article about the bond market that the positive six duration gap "suggests that cash flows from its assets will outpace the stream of payments it owes its debt holders." This could, the Journal said, result in Fannie needing to adjust its interest rate exposure.