Private Label Woes Aid GSE Business.

Washington -- Fannie Mae's credit guarantee business has benefited from the meltdown in the private-label securities market and two new customers who used to rely mainly on its cross-town competitor Freddie Mac. Fannie issued $62.6 billion in mortgage-backed securities in November, up 65% from the same month in 2006. Freddie issued $34.2 billion in MBS, up only 20% since November 2006.

In recent disclosures, Freddie said its "largest customer" reduced its mortgage sales to Freddie. And ABN Amro Mortgage Group did not renew its commitment to sell a large volume of mortgages to Freddie. Bank of America acquired ABN Amro earlier this year.

ABN Amro accounted for 8% of Freddie's securitization volume during the first six months of 2007. Freddie's largest customer accounted for more than 10% of its securitization volume during the first nine months of this year. A Freddie spokesman declined to discuss the customer's name.

But Home Mortgage Disclosure Act data indicate that Wells Fargo Home Mortgage was the largest seller of loans to Freddie in 2006.

Freddie experienced a temporary surge in MBS issuance in September after the secondary market for subprime and alt-A mortgages seized up.

Freddie issued $54.3 billion in participation certificates that month. But its PC issuance dropped to $31.1 billion in October and rose slightly to $34.2 billion in November.

In November 2006, Freddie issued $28.4 billion in PCs. ...