Freddie Mac will stop purchasing and securitizing interest only mortgages.

The company said the IO morgages include Freddie Mac Initial Interest fixed-rate and adjustable-rate mortgages. Freddie Mac Initial Interest mortgages, provide for interest-only payments for a specified period of time beginning with the first monthly payment after the note date, and principal and interest payments on a fully amortizing basis for the remainder of the mortgage term.

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