Freddie Mac (FRE) says it will purchase more Alt-A loans $$ from lenders that use well-defined credit standards to originate mortgages, reports American Banker. That liquidity jolt means more funding for the pipelines of lenders that have sold loans to Freddie in the past:
Charles Coulter, Freddie Mac's vice president of strategy and offerings management, said in an interview that some large Alt-A customers had asked the government-sponsored entity for the commitments to get "greater certainty around their ability to execute."
"Obviously, there's a lot of turmoil in the market, and given the tightening and relative value of the agency guarantee, we wanted to support our customers in the market," he said.
Paul Mullings, a senior vice president for single-family sourcing at Freddie Mac, said in a press release Tuesday that providing a 90-day forward commitment capability to experienced lenders "will accommodate a majority of the fixed- and adjustable-rate Alt-A product, including many of the reduced-documentation mortgages" that the agency buys on a bulk basis.
Nice to see not everyone follows the herd mentality...