Industry News

Freddie Mac shaves its portfolio

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Freddie Mac said Friday its retained portfolio shrank in January for the first time in three months, contracting at an annualized rate of 9.9 percent to $704.2 billion. The contraction followed a 29.9 percent gain in December, reports said. The company bought $12.4 billion for its retained portfolio in January, down from December's $36.2 billion, it said in its monthly volume summary. Alan Greenspan, then-chairman of the Federal Reserve, last year told the House Financial Services Committee he sees "no reasonable basis" for Freddie Mac and its fellow government-sponsored enterprise, Fannie Mae, to hold enormous mortgage portfolios. Both the White House and Greenspan have said Fannie Mae and Freddie Mac pose a risk to the economy because they have grown too large. Legislation to curb the company's mortgage holdings is currently under consideration in Congress. "The portfolio decline was mainly a product of our desire to be opportunistic, and the spreads between mortgage-backed securit...