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Freddie Introduces New 'Float-to-Fixed'.(Federal Home Loan Mortgage Corp.'s service offers)(Brief Article)

Mortgage Servicing News

| April 01, 2004 | COPYRIGHT 2004 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Freddie Mac has introduced a "float-to-fixed-to-float" option for multifamily mortgage lenders.

This feature will enable borrowers to get higher cash flows from their properties earlier in the life of a mortgage, by taking advantage of low short-term floating rates, according to the government-sponsored enterprise.

As well, the borrower could get a fixed rate up front for the rest of the mortgage term, which will serve to eliminate the risk of taking on an exposure to rising rates.

And up to an additional year of floating-rate debt could be used at the end of the loan term to "arrange an exit strategy."

During the initial floating rate period, which is one or two years at the beginning of the mortgage term, the rate is based on the one-month Freddie Mac ...

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Source: HighBeam Research, Freddie Introduces New 'Float-to-Fixed'.(Federal Home Loan Mortgage...

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