The mortgage lender, Federal Home Loan Mortgage Corp (OTCBB:FMCC), announced that it has bought $1 billion in manufactured housing loans. The news came after the year-and-a-half launch of the platform and one year later when Walker & Dunlop first originated the loan through it.
Manufactured housing stock
What Federal Home Loan Mortgage Corp (OTCBB:FMCC) looking at right now is to further extend the program. The company’s Multifamily Vice President Kelly Brady has hinted at the same. During a conversation with GlobeSt.com, Brady said that they don’t want to oversaturate the markets and that they have pumped enough liquidity. In view of which, Freddie Mac will take steps to ensure the stability of the existing manufactured housing equity.
Brady informed that the company is reviewing the idea of backing either unstable or partially developed projects. The reason behind this thought is that the company will be able to finish such unfinished or partially developed projects easily rather than applying for zoning and permits for new projects, a time-consuming process.
Why does it work?
At the same time, Brady pointed that the exit of GE Capital from financial operations has left a significant gap for the company, which needs to be filled. It is to be noted that GE Capital, which was an active contributor to liquidity in manufactured housing had to pull-off from the market after its parent company exited from financial operations. This led to a number of agreements getting void that had been entered between GE and the borrowers.
Brady added that such loans have created plenty of room for Federal Home Loan Mortgage Corp (OTCBB:FMCC) to experiment with new ideas and applications. The company’s decision to include these loans into its Larger K-Deals has actually proved to be successful from investors’ perspective. Brady said that the inclusion enhanced the K-deal, encouraging Freddie Mac to look for further expansion.
Federal Home Loan Mortgage Corp (OTCBB:FMCC) ended the last trading session of the week with another loss of 4.30% and this second day of decline actually fully confirmed the short term correction. The volume of the day 1.2 million was not only much lower than the daily average of 2.9 million but als the lowest in the last 1 week. The dry volume could have consoled the bulls with the hope of the decline not going much deeper if the false breakout was not there. The false breakout signaled the severe weakness of the overstretched bulls.