Freddie Mac Handles $15 Billion in Multifamily Mortgage Settlements in 2010

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Freddie Mac (OTC: FMCC) reported today that it had approximately $15 billion in volume for its multifamily whole loan and bond guarantee business (multifamily mortgage settlements), compared to almost $17 billion in 2009. This volume includes Freddie Mac's targeted affordable housing products, which finance apartments that receive some form of government subsidy.

Mike May, executive vice president of Freddie Mac Multifamily stated, "Freddie Mac's reliable flow of liquidity helped provide stability in the multifamily mortgage market. The market was slow early in the year, and then it was like a switch was flipped on in the third and fourth quarters and market volume surged. We funded approximately 50 percent of our annual volume in the fourth quarter. Property owners who were sitting on the sidelines early in the year started buying and selling properties later in the year partly due to market optimism, low interest rates and wanting to complete deals before the end of the year."

Freddie Mac's multifamily business 2010 highlights:

• Settling more than $13 billion through Freddie Mac's conventional programs;

• $10.3 billion, or almost 70 percent, of total new purchase volume was through our Capital  Markets Execution (CME) program - the largest annual volume amount to date;

• Selling $6.4 billion in CME mortgages underlying six new K Certificate transactions with our guarantee of the Series A certificates totaling $5.7 billion;

• 69 percent of the total 2010 conventional settlements were refinances, 28 percent were acquisitions, and the remainder were new construction financing;

• Transacting more than $1.5 billion in targeted affordable housing products;

• Approximately $500 million in multifamily bond credit enhancements through the Treasury Department's New Issue Bond Program;

• $3.5 billion of the multifamily mortgage settlements used the Freddie Mac Early Rate-Lock option;

• $2.6 billion in ARM fundings, consisting of $1.7 billion of Capped ARMs;

• Purchasing $661 million in seniors housing mortgages;

• Purchasing more than $800 million in student housing mortgages;

• Low delinquency rate at 31 basis points, including K Certificate transactions, as of December 31, 2010;

• Financing more than 1,000 properties amounting to 241,000 apartment units, of which the majority are affordable to families earning low or moderate incomes; and

• Funding approximately 30 percent of new business in the multifamily market in 2010.

May further commented, "We created liquidity for our securities by bringing large deals to market about every other month. We believe investors realize that we have one of the highest quality loan portfolios in the industry, and we are committed to strong credit and asset management practices. We have low delinquency rates, strong lender relationships and work with experienced borrowers who are committed to their properties."

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