Freddie Mac will begin a one-time buyout of substantially all its seriously delinquent loans — 120 plus days — in February. This activity will be reflected in the March 4 prepayment reports.

The GSE will be buying out about $70 billion in loans with an average coupon on the bonds at around 6%. If these loans were not bought out as a result of FAS 166/167, BNP Paribas analysts said they would normally have been bought out at 24-month delinquency. This unless these mortgages were in foreclosure, when they could last longer.

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