Freddie Mac to Provide New PC Pool-Level Delinquency Disclosures on Monthly Basis
McLean, VA – December 7, 2010 – (RealEstateRama) — Freddie Mac (OTC: FMCC) announced today that it expects to begin providing on a monthly basis pool-level delinquency disclosures on its single-family Mortgage Participation Certificate (PC) and Giant PC securities.
Beginning in January 2011, Freddie Mac will provide the disclosures on the company’s Web site, www.FreddieMac.com/mbs. Each month, Freddie Mac will disclose for each PC and Giant PC the loan count and associated aggregate unpaid principal balances (UPB) for mortgage loans that fall into one of four delinquency groups: 30-59 days delinquent, 60-89 days delinquent, 90-119 days delinquent, and 120 days or more delinquent.
Additionally, the new monthly disclosures will include information about certain seriously delinquent loans purchased by Freddie Mac from each PC and Giant PC. This category of disclosure will represent the loan count and associated aggregate UPB of these loans that have been purchased by Freddie Mac out of the applicable PC or Giant PC. These purchases by Freddie Mac will be reflected in the factor for the current month. The related principal payment will be passed through to security holders on the payment date in the current month in the case of fixed-rate PCs and Giant PCs and on the payment date in the following month in the case of adjustable-rate PCs and Giant PCs.
As previously announced by Freddie Mac, the company purchases these loans from the related securities because the loans are 120 days or more delinquent and (i) the cost of making guarantee payments on the PCs backed by these loans, including advances of interest, exceeds the cost of holding such loans in Freddie Mac’s portfolio or (ii) the loans have continued their delinquency for a total of 24 months.
“Freddie Mac is providing the market more timely and detailed information about delinquencies of loans backing our PC and Giant securities,” said Mark Hanson, Freddie Mac vice president, Mortgage Funding. “We understand that the new disclosures may aid market participants in modeling prepayment speeds. We will continue to consider disclosure enhancements that meet our investors’ changing needs.”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
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