Money, Meet Mouth: Freddie to Buy $20 Billion in Subprime Loans
Freddie Mac (NYSE: FRE) said Thursday that it will purchase $20 billion in fixed-rate and hybrid ARM products in an effort to provide lenders with more choices to offer subprime borrowers. The products, currently under development by the GSE and slated to be introduced by mid-summer, will limit payment shock by offering reduced adjustable rate margins, longer fixed-rate terms, and longer reset periods, the company said.