Mortgage-Backed Securities Purchases by Fannie Mae and Freddie Mac Under Scrutiny

Federal Housing Finance Agency Director Bill Pulte noted that government-sponsored enterprises are increasing their mortgage-backed securities purchases. A trade group praised Fannie Mae's volume, which reached $100 billion on July 31, but criticized Freddie Mac for maintaining a flat purchase volume between February and July, at $55.6 billion.

The increased purchases by the government-sponsored enterprises are reported to be helping keep mortgage rates lower than they otherwise would be. The trade group suggested that increasing Freddie Mac's purchases could further reduce spreads by 10 to 12 basis points.

The Federal Housing Finance Agency is responsible for regulating both Fannie Mae and Freddie Mac.