Freddie Mac in 2016: What's Been Done and What's Ahead

Since the new year began, all eyes have been on the Freddie Mac Primary Mortgage Market Survey, which has shown a drop in mortgage rates for four consecutive weeks.¹ This unexpected news has come after a long-anticipated rise in mortgage rates after the Fed's small interest rate hike. Not surprisingly, mortgage applications have risen this month.

News has centered around the Freddie Mac for a few other things as well, including the introduction of its new Real Estate Professionals Resource Center and its first transaction of nonperforming loans in 2016.

The Freddie Mac Real Estate Professionals Resource Center

This webpage launched on Jan. 21 as an all-inclusive resource for real estate agents and other professionals in the industry. Here, real estate professionals can build their industry knowledge, which a press release emphasized will help them build trust and maintain stronger relationships with clients. The page includes four sections: In the Spotlight, 5 Ways to Boost Your Referrals, Be a Housing Industry Expert and Networking Events and Trainings.²

In the spotlight highlights expert opinion on housing finance. Right now it features posts by Freddie Mac's Vice President Danny Gardner that discuss ways to help clients obtain financial assistance.

The section called 5 Ways to Boost Your Referrals includes various online education tools and blog posts. It also provides some Freddie Mac resources for buyers that agents can share with clients. 

The Be a Housing Industry Expert section teaches real estate agents how to help different types of clients, from those who are self-employed or low-income to first-time homebuyers or buyers with low credit scores. The section also offers information on trends in the housing market and also provides tips on how to help clients in danger of foreclosure.

The final section provides a calendar of important real estate events being hosted by either Freddie Mac or the National Association of Realtors. The calendar includes date, location and whether the event includes a fee.

Freddie Mac's First 2016 Nonperforming Loan Transaction

The day after Freddie Mac announced its new resource center for professionals, it publicized a $1.6 billion nonperforming loan transaction.³ According to Freddie Mac, a nonperforming loan transaction is when the enterprise decides to auction off delinquent loans.⁴ The loans are auctioned in two pools: a Standard Pool Offering and an Extended Timeline Pool Offering. The SPO pools are large and vary geographically, whereas the EXPO pools are smaller in size.

The press release said this particular NPL offering will include five SPO and two EXPO offerings, with bids for each due by Feb. 23, 2016 and March 8, 2016, respectively. Bidders have to qualify under certain Freddie Mac standards.

What's Ahead for Freddie Mac

According to the National Real Estate Investor, both Freddie Mac and Fannie Mae are expected to continue thriving this year.⁵

Freddie Mac's lending to apartment properties grew more than two-thirds from 2014 to 2015, reaching $47 billion. In general, the Federal Housing Finance Administration has a $30 billion spending limit for both Freddie Mac and Fannie Mae. In the middle of 2015, however, the FHFA decided that lending to workforce and affordable housing properties did not fall under the $30 billion, which explains the immense growth.

"I think our activity is going to be higher in 2016 than last year," John Cannon, Freddie Mac's senior vice president of multifamily production, told the National Real Estate Investor.

The publication also said that while lending will keep rising, it will do so more slowly in 2016.

Sources

¹ Freddie Mac
² Freddie Mac
³ Freddie Mac
⁴ Freddie Mac
⁵ National Real Estate Investor