Loan-Level Directed Collateral (LLDC)

Loan-Level Directed Collateral^SM allows a dealer to customize eligible collateral at the loan level and then use the customized collateral to back newly issued Freddie Mac Real Estate Mortgage Investment Conduit (REMIC) classes.

LLDC^SM offers more enhanced optionality and customization at the collateral level than previously available in the REMIC program.

See a listing of current LLDC-eligible securities.

How LLDC Works

• Approved dealers use new functionality within the existing Freddie Mac Dealer^® Direct portal to deconstruct eligible pools to the loan level.
• The collateral is re-pooled into new pseudopools based on targeted, disclosed characteristics (LTV, FICO scores, geography, etc.).
• Pseudopools back newly issued Freddie Mac REMIC LLDC classes.

LLDC Deconstruction Eligibility

*Initially, only Freddie Mac-issued L1 (UMBS) and Multilenders are expected to be eligible.

Eligibility for LLDC Pseudopools

• Pooling category (mortgage type), term and security coupon must generally match for all loans assigned to a pseudopool*.
• Original interest rates must be pooled as follows:
  • <112.5 bps over the security coupon
  • >112.5 bps over the security coupon
• 100% of loans backing a pool must meet or exceed a 24-month seasoning requirement

De Minimis exception – like the SIFMA Good Delivery Guidelines, a portion of the pseudopool loans can come from different terms or categories:

• Mixed term: 20-year can be combined with 30-year; 10-year can be combined with 15-year
• Mixed Pooling Category: Conventional with Super-conforming (<=10%); Co-op, Relo, & Extended Buydown (<= 10% max of one characteristic, <=15% in sum with other two).

REMIC Series and Group Allocation Requirements

• LLDC pools can be commingled with other pass-through or Re-REMIC classes within a REMIC group.
• REMIC groups backed partially or entirely by LLDC pools can use any currently eligible REMIC structure and payment rules.
• All LLDC pools must be allocated within a single REMIC group.
• REMIC classes backed partially or entirely by LLDC pools:
  • Are eligible for future Re-REMIC transactions.
  • Are NOT eligible for future Reverse REMIC transactions

LLDC Pool Formation Guidelines

When deconstructing Supers or Giants to the backing pools via Dealer Direct, an individual backing pool may appear multiple times within the same submission:

• When these pools are eligible for loan-level deconstruction, fractional interests in a single loan may appear multiple times within the same deconstruction results. Fractional interests in a single loan must be assigned to the same pseudopool.
• When collateral backing Supers or Giants is only eligible for pool-level deconstruction, fractional interests in a single pool do not require aggregation and can be assigned to multiple subgroups within a single REMIC group.

Dealers can form REMICs on behalf of their customers using Freddie Mac Dealer Direct.

For assistance with the execution of a REMIC transaction, email [email protected].

This product overview is not an offer to sell or solicitation of an offer to buy any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Information Statement and related supplements.