Freddie Mac is buying more of its own participation certificates to prop up the price of its PCs and ensure lenders can sell their Freddie-guaranteed loans into the secondary market.
Freddie purchased $50.3 billion in participation certificates during the first six months of 2013, compared to $15.6 billion in the same period in 2012, according to its 2Q securities filing that was released Wednesday.
The increase in participation certificate purchases is “primarily related to transactions to support the liquidity and price performance of our PCs,” a Freddie Mac spokeswoman said.
Freddie chief financial officer Ross Kari told reporters during a conference call that PCs are facing “declining liquidity and higher bid-offer spreads than we are used to.”
Freddie participation certificates trade at a discount to Fannie Mae MBS. Industry groups like the Mortgage Bankers Association have been urging the GSE regulator to create a single
“There are industry efforts we are aware of to increase fungibility and we welcome those efforts,” Freddie chief executive Donald Layton said.
