Industry News

Freddie Mac launches Initial Interest mortgage products

Loans aim to help borrowers make lower interest-only payments

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At the Mortgage Bankers Association National Secondary Market Conference & Expo in Washington, D.C. Monday, Freddie Mac announced that it will purchase and securitize a range of Initial Interest mortgages that aim to offer more financial flexibility to borrowers. Freddie Mac also announced a new Weighted Average Coupon (WAC) Adjustable-Rate Mortgage (ARM) Cash execution for lenders using its new Web-based selling system.   The new Initial Interest products include several constant maturity treasury (CMT) and LIBOR-indexed ARMs and two fixed-rate mortgages, where the initial loan payments are only interest. Fully amortizing principal and interest payments would begin at the expiration of the initial interest only period. Initial Interest mortgages will be available for assessment through Freddie Mac's Loan Prospector automated underwriting system beginning July 1.   Lenders can choose from a variety of sale executions to deliver Initial Interest mortgages to Freddie Mac be...