Freddie Mac (FRE) will stop purchasing and securitizing interest only mortgages on Sept. 1, 2010, the government-sponsored enterprise announced Friday. While additional information won’t come until Freddie issues an upcoming Single-Family Seller/Servicer Guide bulletin, the new policy applies to Freddie Mac Initial Interest fixed-rate and adjustable-rate mortgages and other similar loan products. Interest only mortgages provide for interest-only payments for a specified period of time beginning with the first monthly payment after the note date, and principal and interest payments on a fully amortizing basis for the remainder of the mortgage term. Earlier this week, Freddie Mac said it lost $7.8bn in Q409, capping off the GSE’s 2009 losses at $25.7bn. While significant, by way of comparison the losses are around half of Freddie’s $50.1bn loss in 2008. Write to Austin Kilgore. The author held no relevant investments.
Freddie to Stop Buying, Securitizing Interest-Only Loans
Most Popular Articles
Latest Articles
11 real estate events & conferences to help you thrive in 2024
Forge new connections at these in-person events and conferences that can help take your career to the next level.
-
In quest to grow reverse business, US Mortgage Corporation hires Krajewski
-
NAR wants VA to change rules that prohibit veteran buyers from paying broker commissions
-
Renters gain financial edge over homebuyers in key U.S. markets: Realtor.com
-
Reverse-centric Ibis Software appoints Sivori to board of directors
-
Clear Capital extends its partnership with Cherre