said the rate of growth in its mortgage portfolio slowed over the first nine months of 2004, reflecting competition from other buyers and less attractive interest spreads. The federally sponsored mortgage merchant released the figures in a press release that also vowed timely financial reporting in the coming year.
Freddie, which paid $125 million last year to settle government allegations of shady accounting, said in a preliminary update Monday that its total mortgage portfolio stood at $1.49 trillion at Sept. 30, compared with $1.41 trillion at Dec. 31, 2003. Its mortgage purchase volume was $383.8 billion in the first nine months of 2004, compared with $668.5 billion last year.
Freddie's retained mortgage portfolio rose by 3.1% from a year ago to $660.7 billion at Sept. 30, 2004.
The company makes money by purchasing mortgage loans from banks, collecting the income or repackaging them as bonds. The portfolio growth Freddie did manage in 2004 reflected a relatively lower rate of mortgage liquidations and the purchase of adjustable-rate mortgage bonds backed by subprime or home equity mortgage loans.
"Mortgage-related investment opportunities in fixed-rate products have not been as attractive to us because strong demand from other investors, coupled with lower mortgage loan originations, have generally resulted in unattractive mortgage-to-debt option-adjusted spreads," Freddie said.
Freddie said it remains on track to provide full-year 2004 financial results by the end of the first quarter of 2005, after which it will return to quarterly reporting.