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Freddie Mac reports recurring developments tied to U.S. housing finance, mortgage liquidity and its role as the Federal Home Loan Mortgage Corporation. Company news commonly covers the Primary Mortgage Market Survey® for conventional conforming mortgage rates, quarterly financial results, monthly volume summaries and activity across mortgage-related portfolios, securities issuance, delinquencies, debt activities and risk management.
Freddie Mac also reports capital markets activity connected to its Single-Family credit risk transfer programs. Updates include STACR® Structured Agency Credit Risk notes, ACIS® reinsurance transactions and tender offers for certain STACR securities, reflecting the company’s use of private capital markets to transfer residential mortgage credit risk.
Freddie Mac (OTCQB: FMCC) has priced its second Seasoned Loans Structured Transaction Trust (SLST) offering of 2021, securitizing approximately $772 million of seasoned re-performing loans (RPLs). The structured transaction includes about $687 million in guaranteed senior certificates and $85 million in non-guaranteed subordinate certificates. This move aims to reduce less-liquid assets in Freddie Mac's mortgage-related investments and mitigate credit and market risk. The transaction is set to settle on July 29, 2021.
Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K Certificates) worth approximately $869 million, set to settle on or about July 29, 2021. The K-F117 Certificates, which back floating-rate multifamily mortgages with 10-year terms indexed to the Secured Overnight Financing Rate (SOFR), feature a total principal amount of $869.203 million and a weighted average life of 9.41 years. The offering includes a senior principal and interest class along with an interest-only class, with the intended goal of transferring risk from taxpayers to private investors.
Freddie Mac (OTCQB: FMCC) announced the pricing of its new offering of Structured Pass-Through Certificates, specifically the K-J34 Certificates, totaling approximately $269 million. These certificates, backed by supplemental multifamily mortgages, are expected to settle around July 29, 2021. The offering features various classes, including A-1 and A-2, with weighted average lives of 3.86 and 7.37 years, respectively. The K Certificates aim to manage risk while providing stable cash flows to investors. Co-lead managers for this offering are J.P. Morgan and Morgan Stanley.
Freddie Mac (OTCQB: FMCC) has priced its SB88 multifamily mortgage-backed securitization, expected to issue approximately $382 million in SB Certificates, settling on or about July 23, 2021. This marks the seventh SB Certificate transaction for the year, backed by small balance loans typically ranging from $1 million to $7.5 million. Freddie Mac guarantees several classes of securities within this offering, enhancing liquidity for smaller apartment properties and supporting less populated markets.
Freddie Mac has been awarded the titles of Issuer of the Year for both residential (RMBS) and commercial (CMBS) mortgage-backed securities by Global Capital. This recognition highlights Freddie Mac’s innovation in credit risk transfer through its STACR and K-Deal securities. Since launching the CRT program in 2013, Freddie Mac has transferred credit risk on over $2 trillion in single-family mortgages. Additionally, Freddie Mac has issued $515 billion in multifamily securities since 2009, focusing on making housing accessible for low- and moderate-income Americans.
Freddie Mac forecasts that low mortgage rates supporting the housing market will gradually increase later in 2021. Despite recent highs, indicators show softening demand in mortgage applications.
Total mortgage origination is expected at $3.9 trillion for 2021 and decline to $2.6 trillion in 2022. The average 30-year fixed-rate mortgage is forecasted at 3.1% in 2021 and 3.7% in 2022. House prices are anticipated to grow by 12.1% in 2021, slowing to 5.3% in 2022. Home sales are projected at 6.9 million in 2021. Refinance originations are set to decrease significantly from $2.2 trillion in 2021 to $713 billion in 2022.
Freddie Mac (OTCQB: FMCC) reported that the average 30-year fixed-rate mortgage (FRM) fell to 2.88% for the week ending July 15, 2021, down from 2.90% the previous week and 2.98% a year ago. This decline marks the third consecutive week of falling mortgage rates, providing modest relief to homebuyers amid strong home appreciation and limited inventory. The 15-year FRM averaged 2.22% and the 5-year adjustable-rate mortgage (ARM) averaged 2.47% during the week. Freddie Mac aims to enhance housing accessibility through mortgage capital provision.
Freddie Mac (OTCQB: FMCC) has priced approximately $912 million in new Structured Pass-Through Certificates (K-F116 Certificates), set to settle around July 22, 2021. These K Certificates are backed by floating-rate multifamily mortgages with SOFR-based rates and 7-year terms. Key details include a weighted average life of 6.66 years and a discount margin of 30-day SOFR average + 21 basis points. Co-lead managers for this offering are BofA Securities and Morgan Stanley. This move reflects Freddie Mac's ongoing strategy to mitigate risks associated with taxpayer-funded mortgage programs.
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Freddie Mac (OTCQB: FMCC) reported a decrease in mortgage rates, with the 30-year fixed-rate mortgage averaging 2.90% for the week ending July 8, 2021, down from 2.98% the previous week. The 15-year fixed-rate mortgage also fell to 2.20%, while the 5-year ARM averaged 2.52%. This decline in rates follows a drop in U.S. Treasury yields and suggests potential opportunities for homebuyers and refinance borrowers. Freddie Mac’s Chief Economist, Sam Khater, indicated that economic growth may lead to rising interest rates in the future.