Freddie Expands Initial Interest Products

Freddie Mac has announced an expansion of its Initial Interest mortgage products to include Constant Maturity Treasury and London interbank offered rate 3/1, 5/1, and 7/1 adjustable-rate mortgages with a 10-year interest-only period.Borrowers choosing these new Initial Interest ARMs will make fully amortizing principal and interest payments only after the 10-year initial interest period expires, Freddie Mac said. The government-sponsored enterprise also announced that starting July 1, originators could sell Initial Interest mortgages through the company's Web-based selling system and opt for Cash or Guarantor executions. Initial Interest mortgages are currently eligible for Guarantor executions through MIDANET or Gold Connection for Delivery. "Freddie Mac's Initial Interest ARMs with 10-year interest-only periods give savvy borrowers three important new ways to match their homebuying ambitions to their individual financial situations," said David Stevens, senior vice president of mortgage sourcing at Freddie Mac. "This also gives originators using Loan Prospector new marketing muscle by expanding the secondary market for an even wider range of interest-only mortgage product."