Freddie Mac Opens Books Further to Investors

McLEAN, VA-Freddie Mac is starting to provide expanded quarterly disclosures on its portfolio of multifamily loans and the company’s multifamily K Certificate securities. Effective immediately, the GSE is posting disclosures about its portfolio of multifamily loans on the multifamily securities page of the company’s website. Then, each quarter, it will update them with information like original loan terms; identifiers for prepaid loans, defaulted loans and delinquencies; property information; and dates of real estate owned (REO) sales.

Freddie Mac will also begin providing expanded disclosures on its K Certificates, structured pass-through certificates backed by multifamily mortgage loans. This can be found on the expanded K Certificates information page.

New information will include information on collateral credit quality and transaction snapshots of K Certificates, including closing date, balance and delinquency data.
What prompted this move was demand by investors in the wake of the popular K Certificate securitization program, David Brickman, Freddie Mac vice president of multifamily CMBS Capital Markets, tells GlobeSt.com.

“People were already familiar with our performance by virtue of the credit losses we expose, but as we began securitizing our K deals regularly and providing some bonds that were not guaranteed by Freddie we found investors asking for more historical performance data--just more detailed information in general.”

The new information being made available relates to Freddie’s whole loan portfolio, with data going back to the 1990s, he says. These include cash mortgages the GSE has purchased--for as long as it has been in operation--and how those loans performed over time.
Not everything will be included in this new data dump: if Freddie securitized the loan at some point there is public information about it available so it is not included. Anything in Freddie’s retained portfolio, however, is.

For investors this means a richer set of data to model, Brickman adds. “Someone can look at the individual books of a business and see how varied the performance is or look at individual loans and build a statistical model from that.”