Freddie Mac said Friday that its portfolio of home loans and mortgage bonds shrank at an annualized rate of 38% last month as federal regulators seized control of the government-sponsored enterprise.

The portfolio, which had expanded by $85.8 billion in April through July, fell by $24 billion in September, to $736.9 billion, as Freddie sold off more assets, the McLean, Va., GSE said in its monthly volume summary.

The pace of the decline slowed from 56% in August as regulators directed Freddie and Fannie Mae to ramp up purchases.

"In its first month under conservatorship, Freddie Mac's retained portfolio didn't do anything much different than it would have otherwise, as best we can see from this morning's monthly summary," Jim Vogel, the head of agency debt research at First Horizon National Corp.'s FTN Financial Group in Memphis, wrote in a note to clients. It is "improbable" that Freddie will substantially increase its purchases this month because its cost of borrowing has risen, Mr. Vogel wrote.

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