Company: FMCCN
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001026214-25-000060
Chunk: 124

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 1
Chunk 124
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25

Management's Discussion and AnalysisRisk Management

(1)     The forbearance data is limited to loans in forbearance that are past due based on the loans' original contractual terms and excludes loans included in certain legacy transactions, as the forbearance data for such loans is either not reported to us by the servicers or is otherwise not readily available to us. Other includes repayment plans and foreclosure alternatives.

Completed loan workout activity includes forbearance plans where borrowers fully reinstated the loan to current status during or at the end of the forbearance period, payment deferral plans, loan modifications, successfully completed repayment plans, short sales, and deeds in lieu of foreclosure. Completed loan workout activity excludes active loss mitigation activity that was ongoing and had not been completed as of the end of the period, such as forbearance plans that had been initiated but not completed and trial period modifications. There were approximately 19,000 loans in active forbearance plans and approximately 17,000 loans in other active loss mitigation activity as of March 31, 2025.

Multifamily Mortgage Credit Risk

Completing Our Own Underwriting, Credit, and Legal Review for New Business Activity 

Our underwriting standards focus on the LTV ratio and DSCR, which estimates the value of the collateral and a borrower's ability to repay the loan using the secured property's cash flows, after expenses. The charts below provide the weighted average original LTV ratio and original DSCR for our new business activity. 

Weighted Average Original LTV Ratio                                                                                                                  Weighted Average Original DSCR(1)  (1)   Assumes monthly payments that reflect amortization of principal.

Transferring Credit Risk to Third-Party Investors

To reduce our credit risk exposure, we engage in a variety of CRT activities through which we have transferred a substantial amount of the expected and stressed credit risk on the Multifamily mortgage portfolio, thereby reducing our overall credit risk exposure and required capital.

Freddie Mac 1Q 2025 Form 10-Q26

Management's Discussion and AnalysisRisk Management

Multifamily Mortgage Portfolio CRT Issuance

While we continue to obtain credit enhancement through subordination, we have increased our use of MSCR and MCIP transactions as a result of larger volumes of fully-guaranteed securitizations. Through MSCR and MCIP transactions, we generally retain first loss exposure, while transferring a portion of the credit risk on our mortgage portfolio. 

The table below provides the UPB of the multifamily