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Freddie Mac may re-enter pre-2008 business line

http://www.globest.com/news/12_559/losangeles/multifamily/Freddie-Mac-Talks-of-Reinstating-Programs-330932.html

Freddie Mac Talks of Reinstating Programs
By Carrie Rossenfeld | Los Angeles


Register and earn AIA/CES, CPE, MCLE, OREA and DRE Continuing Education credits at RealShare Los Angeles on March 27, 2013 at the Hyatt Regency Century Plaza, Los Angeles, CA.

Eisendrath and Brickman discussed financing and the Beastie Boys.

LOS ANGELES-Freddie Mac Multifamily is contemplating reinstituting some value-add financing programs that had previously been stopped, Brian Eisendrath, vice chairman of CBRE, tells GlobeSt.com. Eisendrath recently had a fireside chat here with David Brickman, head of Freddie Mac Multifamily, during which Brickman discussed the programs, which include acquisition-upgrade and acquisition-rehab programs currently in the planning stages but similar to what the GSE had offered in 2007 and 2008, when CBRE clients were doing many renovations.

During the chat, an intimate client event which roughly 50 people attended, Brickman also talked about potential credit changes for 2013, says Eisendrath. “He doesn’t anticipate any additional tightening of the product parameters this year.”

Brickman also discussed where he sees pricing headed, since there may be some room for spreads to compress. “He said one of his concerns is that when treasuries ultimately increase, spreads may increase, too,” says Eisendrath.

As far as the future of Freddie Mac is concerned, “David gave his vision on some of the potential outcomes for Freddie Mac, one of them being potentially separating the single-family and multifamily operations and privatizing the multifamily group,” says Eisendrath. “We also talked a little bit about the securitization process and the success of the K-series, which is basically Freddie Mac’s securitization model, and David was the brainchild behind it. Ultimately, through securitization, borrowers are able to achieve better pricing.”

To lighten the mood, Eisendrath says he and Brickman discussed the Freddie Mac executive’s opportunity to play with the Beastie Boys years ago when he played in a band. The topic helped break the ice on a potentially solemn discussion.

As GlobeSt.com reported in February, Freddie Mac has issued its third multifamily-backed Structured Pass-Through Certificates—a.k.a. its K-Certificates—for the year. The offering, which is expected to be approximately $900 million, is backed exclusively by 5-year collateral, a tweak that the GSE tried out last year and hinted that it would try again when it had accumulated enough paper.