Industry News

Fannie Mae shrinks real estate loan portfolio

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Mortgage giant Fannie Mae, the largest U.S. home funding company, said on Thursday its mortgage portfolio slumped an annualized 25.3 percent in July, the portfolio's ninth consecutive monthly decline. Fannie Mae's retained portfolio totaled $788.8 billion at the end of July, down from $808.2 billion at the end of June. The portfolio has shrunk at an annualized 20.9 percent so far this year as Congress continues to work on legislation that will curb or slash the company's mortgage holdings following an accounting scandal. Portfolio purchases of $9.4 billion last month and sales of $9.3 billion, combined with a $1.1 billion increase in portfolio liquidations to $19.6 billion, caused the shrinkage, the company said in its July summary report. Fannie Mae's mortgage portfolio grew 0.7 percent in all of 2004. Fannie Mae has been shrinking its portfolio to bolster its capital cushion and meet regulatory requirements as it struggles to resolve accounting problems uncovered by the Office...