Fannie Mae, the mortgage goliath taken under government control last September, yesterday announced that its portfolio expanded by an annual rate of 35.1% in May, marking a stark contrast to the 19.2% decline in April.

In its summary of monthly highlights, the agency said it provided nearly $72 billion of liquidity to the market, mostly in the form of Mortgage-Backed Securities ($67.7 billion). Fannie also securitized more than $61 billion of whole loans within their investment portfolio.

Fannie, the largest funder of U.S. home mortgages, began accepting refinance mortgage originations in April, as part of its ‘Making Home Affordable’ Program. This helped their refinance volume increase to $57 billion in May.

“We expect that our refinance volumes will remain above historical norms in the near term, but may fluctuate from month-to-month based on a number of market factors,” the press release stated. Looking ahead, Fannie said the MHA Program “will bolster refinance volumes over time as major lenders adopt necessary system changes and consumer awareness continues to build.”

Fannie’s total portfolio of mortgage holdings grew from $770.1 billion to $789.6 billion in the month, and they are expected to expand it to $900 billion later this year, before reducing activity early next year.

Meanwhile, delinquencies are on the rise: Fannie said the pace of serious delinquent payments ― 90 days or more delinquent ― on single-family Fannie-sponsored mortgages soared 27 basis points to 3.42% in April. Just one year prior, the rate was 1.22%. 

For multi-units, the serious delinquency rate was up two-tenths to 0.36%, quadrupling the rate from last year.

Delinquencies are expected to continue as the unemployment rate approaches double-digits.