http://reitwrecks.com/2010/03/freddie-mac-says-lever-it-up.html High Yield REITs And Commercial Real Estate Thu, 20 Oct 2011 02:26:06 -0700 hourly 1 http://wordpress.org/?v=3.1.2 http://reitwrecks.com/2010/03/freddie-mac-says-lever-it-up.html/comment-page-1#comment-86 crabsofsteel Tue, 09 Mar 2010 17:50:42 +0000 http://reitwrecks.com/?p=359#comment-86 This Freddie Mac program is focussed on saving Freddie Mac. They are effectively the lender on large garbage loans such as Stuy Town , Babcock & Brown, Riverton Apts, etc. They risk taking losses if these loans were to get written down to where they should be (50% or more). So, let's start the compressors and make sure there's financing out there for a new bubble, since those pesky five-year term interest-only loans are starting to come due and those partial i/os are resetting to full P&I. Except that this time, let's make sure that it not Freddie holding the bag (they only hold the senior 60%, and their "partners" take the first loss). It's OK though, since it's impossible for Freddie to lose money. This Freddie Mac program is focussed on saving Freddie Mac. They are effectively the lender on large garbage loans such as Stuy Town , Babcock & Brown, Riverton Apts, etc. They risk taking losses if these loans were to get written down to where they should be (50% or more). So, let’s start the compressors and make sure there’s financing out there for a new bubble, since those pesky five-year term interest-only loans are starting to come due and those partial i/os are resetting to full P&I. Except that this time, let’s make sure that it not Freddie holding the bag (they only hold the senior 60%, and their “partners” take the first loss). It’s OK though, since it’s impossible for Freddie to lose money.

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