Fannie and Freddie Reaching Out to More Nonprime Borrowers.(Federal Home Loan Mortgage Corp. and Federal National Mortgage Association, United States)(Brief Article)(Statistical Data Included)

Fannie Mae and Freddie Mac last year securitized $22.3 billion in subprime loans, increasing their combined market share in the niche by 74%.

According to figures released by the companies, Fannie Mae securitized $13.3 billion in subprime loans, Freddie $9.03 billion.

In 2001, all subprime lenders produced $180 billion in loans, which means the two securitized (or guaranteed) 12.04% of all credit-impaired loans produced by the residential finance industry.

In 2000, the two securitized 6.9% of the $134 billion in subprime loans originated, according to figures compiled by Mortgage Servicing News and its affiliate, the Quarterly Data Report.

The two's combined market share of 12.04% in 2001 is not all that large, but then again, Fannie and Freddie had little or no presence in the subprime market five short years ago.

And it's no secret in the industry that the two would like to securitize or guarantee even more of the market, but so far are concentrating only on A- mortgages, estimated to be about half of all loans produced each year.

It is hard to tell exactly how much in subprime loans or mortgage-backed securities the two are holding in portfolio. A Fannie Mae spokeswoman said that about 22% of the subprime loans it securitized in 2001 are in its portfolio.