MCLEAN, VA--(Marketwire - Jan 30, 2013) - Freddie Mac (OTC: FMCC) announced today that it had a record $28.8 billion in volume for its multifamily business (loan purchase and bond guarantee volume), a 42 percent increase compared to $20.3 billion in 2011. The previous multifamily business activity record was $24 billion in 2008. This volume includes Freddie Mac's targeted affordable housing products, which finance apartments that receive some form of local, state or federal government subsidy.
Quotes from David Brickman, senior vice president of Freddie Mac Multifamily:
- "It was a phenomenal year for us and the sellers and servicers in our network. We achieved record volume while maintaining strong credit discipline and providing essential liquidity to the growing multifamily mortgage market. In the fourth quarter we completed about 33 percent of our yearly volume -- approximately $10 billion in multifamily mortgages."
- "Our K-Deal issuance increased 55 percent this year. We are now in the securitization market every day with new issuances every two to three weeks. In the four years since the program's inception, we've securitized $44 billion in mortgages backed by 5-, 7- and 10-year collateral, as well as floating rate mortgages. We anticipate an increase in securitizations this year with 10-year mortgage loans being the predominant loan type as borrowers lock-in the low interest rates."
- "Multifamily is a profitable business line for Freddie Mac, and has produced nearly $4 billion in segment earnings since 2010. This includes $1.65 billion in the first nine months of 2012." (Fourth quarter 2012 earnings data has not been released).
Freddie Mac Multifamily 2012 business highlights:
- A record-breaking year for Freddie Mac's Capital Markets Execution(SM) (CME) program, settling $25 billion, or 88 percent of the total new purchase volume;
- Securitizing $21.2 billion in CME mortgages underlying 17 new K Certificate transactions with our guarantee of the Series A certificates totaling $17.9 billion;
- 54 percent of the total 2012 loan purchases or credit enhancements were refinances and 40 percent were acquisitions;
- Settling roughly $3 billion in targeted affordable housing products of which approximately $2.4 billion were multifamily bond credit enhancements;
- Purchasing about $650 million in seniors housing mortgages;
- Purchasing more than $1.7 billion in student housing mortgages;
- The lowest delinquency rate in two years of 19 basis points as of December 31, 2012. (Delinquencies are based on the unpaid principal balance of mortgage loans that are two or more monthly payments past due or in the process of foreclosure.);
- Provided financing for over 1,600 properties amounting to more than 435,000 apartment units, of which the majority are affordable to families earning low or moderate incomes;
- Increased transparency by disclosing CME loan settlement volume comparing original LTV to LTV at maturity, and launched the Mortgage Securities Investor Access tool for investors to monitor K-Deal performance and conduct credit analysis; and
- Achieved a commercial mortgage-backed securities (CMBS) special servicer rating of "CSS2-" from Fitch.
Click here to read the 2011 business volume press release.
Since the launch of Freddie Mac's multifamily business in 1993, it has provided more than $290 billion in financing for about 60,000 multifamily properties.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing. www.FreddieMac.com. Twitter: @FreddieMac