Industry News

Freddie Mac says it will snatch up Alt-A loans

Mortgage repurchaser makes 90-day commitment

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Freddie Mac is giving experienced lenders a 90-day commitment to buy up Alt-A loans, including reduced-documentation mortgages, which should give more Alt-A borrowers the ability to lock in rates for three months. "Freddie Mac continues to be an active force in the Alt-A market and is taking steps to increase liquidity in the Alt-A market while maintaining its commitment to prudently and responsibly manage mortgage credit risk," Paul E. Mullings, Freddie Mac's senior vice president for single-family sourcing, said in a statement Tuesday. Freddie Mac is providing 90-day forward commitment capability on a negotiated basis to experienced lenders, Mullings said, with credit terms that will accommodate a majority of the fixed- and adjustable-rate Alt-A product. That includes many of the reduced-documentation mortgages underwritten with appropriate credit-risk offsets that Freddie Mac now purchases on a bulk basis through structured transactions, he said. "Available ...