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Discover competitive ARM execution options for short- and long-term profitability
Are you holding in your portfolio portions of the $500 billion of ARMs scheduled to adjust for the first time this year? How is the slow down of the once hot ARM market impacting your flow business? Do you need to restructure your balance sheet to manage risk-based capital requirements in response to market shifts?
As you ask yourself these questions, think about execution options for your prime ARMs that will help you realize new possibilities for your business, while maintaining profitability in a changing market. Whether you're looking to sell your ARMs through flow or bulk transactions, we offer competitive execution options for managing your portfolio holdings and current ARM production. Our execution options provide you with more opportunities to:
- Get the secondary market flexibility you need. Sell your Constant Maturity Treasury (CMT)- and London Interbank Offered Rate (LIBOR)-indexed ARMs with various rate and cap structures through our Weighted Average Coupon (WAC) ARM Cash execution to gain the liquidity you need to originate more loans. With a WAC ARM Cash execution, you can:
- Sell ARMs with various margins and interest rates (within specified ranges) in a single, flexible contract that is not limited by tight contracting terms
- Reduce your exposure to interest rate fluctuations and the corresponding changes in ARM pricing on your ARMs that have not yet closed
- Receive additional flexibility, including commitments from 2 to 90 days, faster funding, and more
- Manage your risk-based capital requirements. Adjust your loan-to-deposit or loan-to-share ratios when you sell a variety of ARMs for securities using our WAC ARM Guarantor execution. Holding a Freddie Mac security requires less capital than holding whole loans in your portfolio. The WAC ARM Guarantor execution allows you to:
- Receive Freddie Mac WAC ARM Participation Certificates (PCs) for whole loan ARM products that adjust using the 1-Year Weekly CMT Index or the 6-month and 1-Year LIBOR Index
- Reduce your capital costs when you swap and hold WAC ARM PCs
- Deliver your mortgages the same day you take out a WAC ARM Guarantor contract
- Realize a gain on ARM sales. Sell your ARMs now and realize a potential gain-on-sale while the opportunity exists, as ARM portfolios suffer significant prepayments as the roll date approaches. Leveraging the capital markets to create ARM securities will allow you to improve capital and increase borrowing capacity.
Learn more about selling your prime ARMs
Our expansive, web-based selling system gives you the system capability you need to sell more than 70 different CMT- and LIBOR-indexed ARMs with various rate and cap structures. For complete information on ARMs you can sell to Freddie Mac using the WAC ARM Cash and WAC ARM Guarantor executions through selling system:
Also, be sure to visit our selling system web page often for further information to enhance your secondary market execution opportunities every step of the way. On this web page you'll find valuable information on:
- Pricing
- Special mortgage product delivery details.
- Training resources for loan delivery
- Customer service support, and more.
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