Freddie Improves MBS Disclosures

Freddie Mac is improving its mortgage-backed securities disclosures on adjustable rate mortgage and interest-only loan products so that investors have more up-to-date information on the loan pools. "Expanding disclosure capabilities increases the transparency of our ARM Participation Certificates and contributes to investors' increased understanding of our securities," Freddie vice president Mark Hanson said. Currently, Freddie discloses the original weighted average remaining months to maturity (WARM) on newly issued ARM and ARM Giant PCs, but it is not updated. Starting in September, Freddie will update the WARM on a monthly basis so that investors will have the "most up-to-date information about the current state of the pool," vice president Phil Guth said. This updated or current WARM will reflect the fact that loans have dropped out of the pool due to refinancings and payoffs. Freddie also will disclose the original weighted average loan age, the original weighted average original loan term, the current weighted average loan age and the current weighted average original loan term. "These are all new fields for us," Mr. Guth said.