Freddie Mac is now offering Reverse REMIC Giant PC securities – a new mortgage-related security intended to provide additional liquidity to the U.S. residential mortgage market and give new options to investors. The new issuance began with the GSE’s March 30th REMIC [Real Estate Mortgage Investment Conduit] settlements.
Mark Hanson, Freddie Mac’s VP for mortgage funding, commented, “Freddie Mac Reverse REMIC Giant PC securities are designed to provide a new, additional dimension of liquidity to the residential mortgage-backed securities market. Historically, remaining tranches in REMIC securities lacked the liquidity sought by investors. Freddie Mac Reverse REMIC securities provide a new alternative investment vehicle by converting them into Freddie Mac Giant PC securities.”

Freddie Mac explained that the Reverse REMIC program permits a pro-rata portion of all outstanding Freddie Mac REMIC security classes from a previously issued REMIC group – which, in aggregate, constitute a pass-through from the mortgage collateral backing the original REMIC group – to be recombined into a pass-through Re-REMIC class. This pass-through Re-REMIC class in turn becomes the collateral backing a new Freddie Mac Giant PC security that is eligible collateral for all Freddie Mac re-securitization programs. Additionally, Freddie Mac said if the collateral backing the original REMIC met the market good-delivery guidelines at origination from the Securities Industry and Financial Markets Association (SIFMA), the new Giant security also will meet those same good-delivery guidelines.
Beginning with March 30th REMIC settlements, Freddie Mac issued 15-, 20-, and 30-year Reverse REMIC Giant PCs under the following prefixes: – Z4: 30-year Reverse REMIC Giant PC – Z5: 15-year Reverse REMIC Giant PC – Z6: 20-year Reverse REMIC Giant PC
Additionally, Giant PC securities are available for 40-year, 10/20 Initial Interest Fixed-Rate, 100 percent Relocation Mortgages, Reduced Minimum Servicing, and Prepayment Penalty Reverse REMIC.