Government-chartered mortgage repurchaser Fannie Mae expanded its loan-purchase, guarantee and securitization business at an annual rate of 20 percent in October — the fastest rate of growth since May.

The rapid expansion in Fannie Mae’s “book of business” — the sum of loans it holds as investments, guarantees or securitizes — was driven by 16.8 percent annual growth in loans guaranteed or securitized, to $2.34 trillion.

Fannie Mae reported that it also grew its mortgage portfolio — loans and mortgage-backed securities (MBS) Fannie holds for investment — at an annual rate of 17.3 percent during October, to $732.3 billion.

The mortgage repurchaser cut back MBS issues to $49.4 billion, a 15 percent reduction from September and the lowest level since April. But at $502.9 billion, Fannie Mae’s MBS issuance for the first 10 months of 2007 has already exceeded the $481.7 billion total for all of 2006.

Fannie has gradually reduced holdings of its own MBS in its mortgage portfolio to $265 billion, down 14 percent from a year ago. Other holdings in the portfolio included $312.6 billion in mortgage loans purchased by Fannie Mae, up 3.7 percent from September and 15.6 percent from a year ago.

Fannie Mae held $121.9 billion in “private-label” mortgage-backed securities issued by investment firms in its own portfolio, down slightly from a recent peak of $123.9 billion in August.

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