Freddie Mac's Shrinking Portfolio

The retained mortgage portfolio at Freddie Mac (FRE) is declining with alacrity. It peaked in March of this year at $867 billion and was down to $780 billion at the end of March.

The portfolio has declined at a particularly rapid rate in July and August as it fell $31 billion in July and $20 billion in August.

I believe that the failed giant is under orders to shrink its portfolio by 10 percent in 2010 and it looks as though they have gotten a runing start on that concept.

Total delinquencies are also rising. In August 2008 delinquencies stood at 1.11 percent of the portfolio. Delinquencies a year later are at 3.13 percent.

Along with the shrinkage (sounds like a topic for a Seinfeld episode) in the portfolio is the total amount of outstanding debt supporting the portfolio. Total debt peaked in March at $ 932 billion and was down to $854 billion at the end of August.

Comments

[the gerald:]

"the failed giant" i like those words. you use the same words for C,bac,wbc,gs,leh,aig,a... cs, in banks, and gm,f, chrysler, etc.(etc is not a company)

did you say anything?

Sep 26 08:50 AM

[BRUCE E. W.:]

So what debt/equity figures are relative to the reconstructive context and prevailing re-solvency of its stock in trade: mortgage fallback; downsizing and recovering ground at a safe rate? It sounds like you just want to crash the stock. Is that part of your function, or did I get this wrong? It's the only working format for the subprime restoration and if an authentic "recovery" can happen over time it will still be painful. It seems you just want to bite the bride, however, and are pressing hard on the fundamentals of a ground level "bailout" that goes to real level (real estate) people.
If you are tracking success or failure, I apologize. But if you mean to be constructive about this type of linear and one dimensional assessment than I suggest you provide some more meat into your soup: It's all bone.

Sep 26 12:06 PM

[ATWshop:]

I agree with Bruce on this one. What are we to do with this data? On the surface, this strikes me as a very good sign...but just the slow down in the Real Estate market could have brought about the same results. Then FRE could have tightened their underwriting rules to bring this about. Need more information to make an "informed" decision regarding the future of the stock.

Oct 03 06:54 AM