Freddie Offers Warehouse Credit Guarantee
Freddie Mac (FRE) officially announced the creation of its pilot program to provide standby commitments to purchase qualifying loans in the event a seller/servicer either cannot meet its contract obligations or fails. One of the first warehouse lenders to participate in the program is Natty Mac. Freddie Mac sellers and servicers that participate in the program are required to enter into a separate agreement with the participating warehouse lender for a separate warehouse credit line that will only fund loans the seller/servicer intends to sell to Freddie Mac. “The warehouse lending industry has nearly exited the market making it increasingly difficult for lenders to fund loans,” said Freddie Mac CEO Charles Haldeman Jr. “We're proud to help bring much-needed additional liquidity to the residential and apartment financing community.” When HousingWire reported on the plan earlier this week, community banking advocates praised it as a way to reduce risk for warehouse lenders and promote liquidity for small lenders. Write to Austin Kilgore.