In the normal course of securitization, timing differences between purchases of home mortgages and sales of MBS imply an inventory of home loans, although most such transactions are simultaneous swaps of packages of home mortgages for MBS. Moreover, there may be some affordable housing mortgages unsuitable for securitization that serve the chartered mission of the GSE.
But in total, the assets required for Fannie and Freddie to achieve their mission are but a small fraction of the current level of their assets. BIS Review 37/2005  3  Thus, if the Congress legislates a mission-only need for GSE portfolio assets, a substantial liquidation of MBS over time, coupled with an equivalent redemption of GSE debt, will doubtless be required.