Report: Freddie Mac was shedding mortgages

WASHINGTON, Sept. 27 (UPI) -- Mortgage giant Freddie Mac was quickly shedding mortgages in an effort to raise cash when it was seized by the U.S. government, new figures show.

U.S. Treasury officials said when they were taken over this month that Freddie Mac and its sister mortgage firm, Fannie Mae, were cutting back on their primary roles of supporting the U.S. mortgage markets, a prime justification for the seizure. That assertion about Freddie Mac has been borne out by newly released figures, The Washington Post reported Saturday.

The financial records show that Freddie Mac officials had trimmed the company's mortgage portfolio by $37.4 billion in August, which, if it would have continued, would have cut its portfolio in half within a year, the newspaper said.

Freddie Mac and Fannie Mae play key roles in the U.S. mortgage market by buying mortgages from lenders, supplying them with cash to make more loans. Since their takeovers, the entities have been ordered return to their core mission by buying more mortgages in an effort to strengthen the struggling mortgage market, the Post said.

Increasing mortgage delinquencies reduced the value of Freddie Mac's portfolio and forced it to cover more losses on loans it guarantees.