Magazine article American Banker

Freddie Mac Gains Some Ground over Fannie Mae in Market Share

Magazine article American Banker

Freddie Mac Gains Some Ground over Fannie Mae in Market Share

Article excerpt

WASHINGTON -- Freddie Mac gained some small ground over Fannie Mae in the first half of this year in their long-running fight for market share.

The most dramatic shift took place in the secondary market for adjustable rate mortgages. Freddie trounced Fannie, and grew its share of that shrinking pie by a fifth.

Lenders and Fannie Mae said Fannie is trying to recoup those losses.

The ARM market "has been tough for us," acknowledged Donna Callejon, senior vice president for single-family marketing at the Federal National Mortgage Association.

"What our customers have been telling us is that we are not as competitive as Freddie Mac on ARMS, both on pricing and underwriting," she said.

No Strategic Decision

The Federal Home Loan Mortgage Corp., known as Freddie Mac, said there had been no strategic decision to go after the ARM market.

"Our market share is up across the board," said Jim Cotton, director of business management.

The two secondary market giants bought $219.6 billion of mortgages in the first half of this year, up slightly from $214.1 billion in the period last year. Freddie's share of that market grew about 2.5 percentage points, to almost 44%.

The market for adjustable-rate-mortgages went down slightly to $16.8 billion in the first six months, from $17.2 billion. But Freddie's share of that market grew to almost 58%.

|The Lion's Share'

"There is a fairly small pie of ARM loans being originated. …

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