Freddie Mac To Purchase More Alt-A Loans From Lenders

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...

Comments

[BillCust:]

Read carefully. The "credit box", or the stuffs they would like to accept as Alt-A just got immensely tighter. This is a "do not enter" sign disguised as a welcome mat. Just to give you an idea, 80% of the stuffs that banks delivered to them would get cut and rejected for funding. The herd? Well, there's cow Fannie and cow Freddie. You'd get trampled thinking they do some bailing out.

2007 Aug 15 04:01 PM