Freddie Mac last month started providing monthly loan-level updates on its single-family mortgage PC securities issued after Dec. 1, 2005. Industry participants applauded the move because the increased disclosure allows for better understanding of the GSE's securities. But at the same time, others are asking for more information, specifically on the credit side.
The recently released new loan level disclosures from Freddie Mac are a positive for the mortgage market, according to officials from the agency. "It allows investors to look at each attribute individually, improving predictability, and positively impacting prepayment valuation." said Neil Hughes, director of mortgage funding at Freddie Mac. Through these loan level disclosures, Hughes said that investors could better assign value to each security by allowing them to look at these mortgages more in depth. He added that this shows that Freddie Mac recognizes the market's desire for more transparency, predictability and liquidity. The added information is also expected to improve the trading of Freddie Mac securities. "Because we're offering more information than the other agencies, we would hope that demand for our securities would increase, commanding some sort of pay up," Hughes said.