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Fannie Mae’s Mortgage Portfolio Continues to Fall

Fannie Mae’s gross mortgage portfolio contracted for the fourth straight month, according to the company’s December 2016 Monthly Volume Summary.

December’s 51.9 percent annual rate of contraction topped November’s contraction rate of 37.1. August of 2016 was the last month to see any sort of expansion, when the portfolio grew at an annual rate of 9.1 percent.

Following the contraction, the unpaid balance amounted to $272.4 billion at the end of the month.  This represents a $17 billion decrease from November’s figure of $289.5 billion, as the amount of sales ($40 billion) and liquidations ($4.6 billion), surpassed the total amount of purchases of nearly $28 billion for the month, according to the report. Given the most recent figures, the annual compounded rate of contraction for the entire year comes to 21.1 percent.

Fannie Mae’s total book of business, which includes the gross mortgage portfolio plus total Fannie Mae mortgage-backed securities and other guarantees minus Fannie Mae MBS in the portfolio, increased at an annual compound rate of 2.6 percent for the month. December’s figure brings the overall year’s compound growth rate to 1.4 percent.

The amount of Fannie Mae mortgage-backed securities within the total book of business dwindled down to $42 billion at year’s end, a considerable decrease from January 2016’s figure of nearly $75 billion. The figure had been decreasing fairly consistently throughout the year, but saw a slight bump in August, where it hit $61 billion and stayed around the $60 billion range for the next three months until it dropped to $41 billion in November.

Fannie Mae’s continued efforts to decrease its mortgage portfolio are evident by viewing the consistent contraction the portfolio experienced throughout 2016. 2017 will likely experience consistent contractions similar to those seen in 2016.

About Author: Timothy McNally

Tim McNally is a journalist with experience in business reporting. His journalism career began with Houston Energy Insider as an Energy Reporter, which eventually led him to secure a position with OILMAN Magazine as Digital Content Manager. McNally is a native Texan, and he received his degree in Finance from the University of St. Thomas. He is a staff writer for the MReport.

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