Freddie Mac has begun using the Giant mortgage participation certificates as a way to create economies of scale internally within its retained portfolio, according to a spokesman.
The spokesman told this publication the move has no impact on the outside market and is “pretty straightforward,” allowing Freddie Mac to reduce administrative costs.
Issuers have since 1988 created Giant PCs by consolidating Freddie Mac PCs into larger single-class securities. The spokesman said the new internal Giant PCs are entirely separate and do not have any impact on traditional Giant PCs.
The spokesman said he did not have specific numbers when it comes to the extent of internal Giant PCs creation, but he said a “small” amount have already been created and more will be done going forward.
