As mortgage loan volume continued to plummet in October, Fannie Mae and Freddie Mac suffered a "spasmodic contraction'' in portfolio growth, according to an analyst at Sanford C. Bernstein & Co.
What's more, said Jonathan Gray, an analyst at New York-based Bernstein, the companies' declines last month will continue through the fourth quarter. He estimated that Fannie's retained portfolio growth will be 13.6% in the fourth quarter and 25.6% for the year. For Freddie those numbers will be 12.7% and 27.2%, he said. Mr. Gray's findings echo a recent report by Prudential Securities that said Fannie and Freddie's portfolios have grown about 23.5% this year, down from 39.4% in 1998. The companies have purchased $273.5 billion of mortgage-related securities and liquidated $111.3 billion in 1999, the report said.