Freddie Mac made its goal of attracting more investors back into the secondary mortgage market more of reality this month by adding 21.5 million single-family mortgages to the government-sponsored enterprise’s single-family loan-level dataset.
Prior to these additions, the data available to investors remained limited to loan level data and loss data on 30-year, fixed-rate single-family loans. With this new information, Freddie says potential investors interested in credit risk can now see loan level data on 3.3 million, 15- and 20-year fixed-rate single-family mortgages, originated between Jan. 1, 2005 and Dec. 31, 2014. In addition, the database includes 18.2 million, 30-year, fixed-rate mortgages originated between Jan. 1, 1999, and Dec. 31, 2014.
For Freddie Mac, transparency is the key to regaining investor confidence.
"Providing investors with this expanded view of credit risk for additional fixed-rate single-family mortgages will enable us to grow and evolve our credit risk offerings by expanding the products available for risk transfer and increasing the amount of risk transferred to private investor,” said Kevin Palmer, senior vice president of credit risk transfer for Freddie Mac. “Releasing this data now will help give potential credit investors sufficient time to analyze Freddie Mac's actual loss performance.”
Investors reviewing the information will receive the following: a loan’s monthly performance, credit performance, and property disposition information.
The data will not include adjustable-rate mortgages, loans with balloon payments, interest-only loans, government-insured mortgages or loans refinanced through the Home Affordable Refinance Program and other affordable or non-standard mortgages, Freddie said.
"Freddie Mac continues to look for opportunities to transfer mortgage credit risk to private investors in an economically sensible way,” Palmer said when discussing the reasoning behind the new loan data. “Adding all fixed-rate products to our Single-Family Loan-Level Dataset allows us to explore other credit risk transfer opportunities."