Mortgage Daily

Published On: May 23, 2003

Freddie Portfolio Down

Secondary lender reports drop in business

May 23, 2003

By MortgageDaily.com staff

A secondary market behemoth shrank again in April, according to the company’s volume report.

April marks the third month this year that Freddie Mac has reported losses in its total portfolio, which has dropped below $1.3 trillion for the first time since November. The portfolio balance totaled $1.29 trillion at the end of April, the report said.

Freddie reported a whopping $76.9 billion in liquidations for the month, up 24 percent over March. With $64.3 billion in new business, the annualized growth rate was reported at negative 11.6 percent.

This year, only March’s numbers have shown new mortgage business outpacing liquidations. In contrast, new business outweighed liquidations consistently for all 12 months of 2002.

Total Participation Certificates (PCs) issued in April were $51.7 billion, $19 billion shy of the $70.7 billion in PC liquidations, according to the statement. For the year, the PC net balance is down $28 billion. April’s selloff lowered the PC balance to $1.054 trillion, its lowest since June of 2002, according to the report.

Freddie’s retained portfolio was reported down 1.2 percent (on an annualized rate). Also down were structured securitizations, from $32 billion in March to $26 billion for April’s close, the company said.

Some good news could be found in Freddie’s duration gap which was reported at zero for April, bouncing back from March’s negative one.

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