Freddie Mac Makes its First LOC, Which May be Its Last
May 11, 2018
Freddie Mac’s recent decision to extend a line of credit to a nonbank seller/servicer has set off a mini firestorm, with some industry stakeholders taking issue with a government-controlled company providing a service readily available from the private sector. As one industry consultant phrased it: “It sounds to me like they’re undercutting the warehouse banks.”The credit in question is an LOC collateralized by a mortgage-servicing portfolio whose size is reportedly in the range of $5 billion to $7 billion. The loan amount was not released, but could total $50 million, said one advisor who claimed to have knowledge of the transaction.