Fannie Mae is finding that international investors are ready takers of mortgage-backed securities that it assembles from the loans it buys.

The government-sponsored enterprise has placed $50 billion of the securities in countries from Canada to Singapore. That's about 10% of Fannie's $500 billion in outstanding mortgage-backed securities issues and is up from $30 billion five years ago.

The foreign sales, which began as an experiment in the late 1980s, have grown into a full-fledged program that takes Fannie Mae representatives all over the world.

"We try to get capital from the broadest possible base," said Gene A. Spencer, a vice president who heads the international program for Fannie Mae, formally the Federal National Mortgage Association.

Industry observers say the approach has merit. "It expands the market of available investors," said Linda Lowell, first vice president at PaineWebber Inc.

When more investors clamor for new offerings of securities, prices will increase and the yield will drop, she said. When this happens, lenders are able to decrease the rates they charge borrowers.

To broaden its customer base, Fannie has begun polling traders all over the world to find where the most demand lies.

Foreign investment in Fannie's securities has historically ebbed and flowed according to countries' fortunes.

For instance, Japan was far and away the biggest foreign investor in mortgage securities five years ago, Mr. Spencer said. Now, European countries, especially the United Kingdom, are the big buyers, he said.

Fannie has even received inquiries from the Czech Republic and the principality of Abu Dhabi.

As is the case in the United States, foreign countries' banks are the biggest buyers of mortgage securities. The investments are placed in their portfolios as a way of balancing liabilities, Mr. Spencer said.

Fannie also places mortgage securities with U.S. money management firms such as J.P. Morgan & Co. that work on behalf of foreign investors.

Fannie Mae is also selling mortgage securities in the Middle East through British money managers.

Foreign investors don't differ much from their U.S. counterparts, Mr. Spencer said. "They all want to get the best possible return with the least risk," he said.


The Treasury Department has decided to relinquish its role as the scheduler of corporate debt offerings by Fannie Mae and Freddie Mac.

In stepping back to allow the agencies to handle the scheduling themselves, the Treasury is accepting a cooperative program the agencies will adopt.

The decision follows a recommendation by the borrowing advisory committee of the Public Securities Association.

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