The End of Interest-Only Loans?
Freddie Mac has announced that it will no longer purchase or securitize interest-only loans, effective September 1, 2010.
Freddie Mac stated “Our purchases of these mortgages and issuances of guarantees of them, expose us to greater credit risks than do other types of mortgages.”
Freddie Mac posted a $7.8 billion (yes, that was a “B”, Martha!) loss for the 4th quarter of 2009 and a $25.7 billion (hmmmm . . . this is soon gonna add up to real money here!) loss for the entire year.
Freddie Mac’s interest-only and “Alt A” loans accounted for 44% of Freddie Mac’s credit losses in 2009.
Gee, mebbe they shudda done this sooner???
Source: DSNews.com
March 3rd, 2010 Posted in Inside Real Estate
Print
