Freddie Mac's retained portfolio grows in April

Freddie Mac's retained portfolio grew at an annualised rate of 9.8 percent in April, the third consecutive time it expanded its book of mortgage investments in six months, the company said on Tuesday. Freddie Mac, the second largest US mortgage finance company had a retained portfolio of $662.1 billion at the end of April - its highest level in four months. Freddie Mac had been shrinking its investment portfolio amid political pressure to downsize in the wake an accounting scandal nearly two years ago. Also, buying mortgage loans and securities has become more expensive due to persistent demand from competing investors like banks and foreign buyers.
"We have said consistently that we would grow the portfolio prudently when opportunities arose in the market and that is what happened in the last three months, so we did just that," said Michael Cosgrove, a spokesman for Freddie Mac.
The size of its retained portfolio grew due to more purchases of securities guaranteed by companies other than Freddie Mac that are non-agencies, the company said.
Meanwhile, Freddie Mac's mortgage loan holdings fell last month to $61.1 billion from $61.7 billion in March, the company said in its monthly volume summary.
The company's duration gap, which gauges its interest rate risk, averaged zero months for April, unchanged from March. This measures the difference in months between the durations of assets and liabilities in the company's mortgage portfolio. A zero duration gap indicates Freddie Mac's payments to its debt holders matches the income the company receives on its assets. Freddie Mac said it bought $24.5 billion in mortgage securities for investment last month versus $20.8 billion in March.
Year-to-date the retained portfolio has grown at an annualised rate of 4.2 percent, as purchases have exceeded sales and holdings that have matured or prepaid.
The company's total mortgage portfolio, the sum of its investment and Freddie Mac mortgage securities held by outside investors, grew at an annualized 14.4 percent in April, up from March's 4.8 percent. Year-to-date the mortgage portfolio has grown at an annualized rate of 8.6 percent. Freddie Mac's total portfolio stood at $1.548 billion at the end of April, up from March's $1.530 billion.