Fitch to Rate FREMF 2016-K58 Multifamily Mtg PT Ctfs & Freddie Mac SPC, Ser K-058; Presale Issued

CHICAGO–(BUSINESS WIRE)–Link to Fitch Ratings’ Report: FREMF 2016-K58 Multifamily Mortgage
Pass-Through Certificates and Freddie Mac Structured Pass-Through
Certificates, Series K-058 (US CMBS)

Fitch Ratings has issued a presale report on FREMF 2016-K58 Multifamily
Mortgage Pass-Through Certificates and Freddie Mac Structured
Pass-Through Certificates, Series K-058.

Fitch expects to rate the transaction and assign Rating Outlooks as

FREMF 2016-K58 Multifamily Mortgage Pass-Through Certificates

–$149,429,000b class A-1 ‘AAAsf’; Outlook Stable;

–$894,523,000b class A-2 ‘AAAsf’; Outlook Stable;

–$59,334,000bc class A-M ‘A+sf’; Outlook Stable;

–$1,043,952,000ab class X1 ‘AAAsf’; Outlook Stable;

–$59,334,000abc class XAM ‘A+sf’; Outlook Stable;

–$1,043,952,000a class X2-A ‘AAAsf’; Outlook Stable;

–$51,315,000 class B ‘BBB+sf’; Outlook Stable;

–$32,073,000 class C ‘BBB-sf’; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series K-058

–$149,429,000b class A-1 ‘AAAsf’; Outlook Stable;

–$894,523,000b class A-2 ‘AAAsf’; Outlook Stable;

–$59,334,000bc class A-M ‘A+sf’; Outlook Stable;

–$1,043,952,000ab class X1 ‘AAAsf’; Outlook Stable;

–$59,334,000abc class XAM ‘A+sf’; Outlook Stable.

(a) Notional amount and interest only.

(b) Guaranteed by Freddie Mac. Ratings are based solely on the
underlying collateral and without respect to the Freddie Mac guarantee.

(c) Classes A-M and XAM could be rated ‘AAAsf’ if the Freddie Mac
guarantee would be accounted for.

These expected ratings are based on information provided by the issuer
as of Oct. 17, 2016. Fitch does not expect to rate the following classes
of FREMF 2016-K58: the $179,604,855 interest-only class X3, the
$238,938,855 interest-only class X2-B, or the $96,216,855 class D.

Additionally, Fitch does not expect to rate the following class of
Freddie Mac Structured Pass-Through Certificates, Series K-058: the
$179,604,855 interest-only class X3.

The certificates represent the beneficial ownership interest in the
trust. The trust’s primary assets are 74 loans secured by 74 commercial
properties having an aggregate principal balance of approximately $1.28
billion as of the cut-off date. The Freddie Mac Structured Pass-Through
Certificates, Series K-058 (Freddie Mac SPC K-058) represents a
pass-through interest in the corresponding class of securities issued by
FREMF 2016-K58. Each Freddie Mac SPC K-058 security has the same
designation as its underlying FREMF 2016-K58 class. All loans were
originated specifically for Freddie Mac by approved Seller Servicers.
The certificates follow a sequential-pay structure.

Fitch reviewed a comprehensive sample of the transaction’s collateral,
including site inspections on 68.4% of the properties by balance and
cash flow analysis of 75.0% of the pool.

The transaction has a Fitch stressed debt service coverage ratio (DSCR)
of 1.02x, a Fitch stressed loan-to value (LTV) of 118.8%, and a Fitch
debt yield of 7.10%. Fitch’s aggregate net cash flow represents a
variance of 9.25% to issuer cash flows.


Higher Leverage Consistent with Recent Transactions: The pool’s Fitch
DSCR and LTV are 1.02x and 118.8%, respectively. These levels represent
slightly higher leverage than the Fitch-rated 2016 YTD DSCR and LTV for
10-year, K-series Freddie Mac deals of 1.03x and 116.4%, respectively,
and the respective 2015 averages of 1.08x and 115%. In addition, 68.1%
of the loans in the pool have a Fitch DSCR lower than 1.00x; the average
2016 YTD percentage was 59.1%.

Limited Amortization: The pool is scheduled to amortize by 11.0% of the
initial pool balance prior to maturity, above the Fitch-rated Freddie
Mac 10-year 2016 YTD and 2015 averages of 10.5% and 10.2%, respectively.
Eight loans (10.3%) are full-term interest-only, and 49 loans (74.7%)
are partial interest-only. The remaining 17 loans (15.0%) are amortizing
balloon loans with a term of 10 years.

More Concentrated than Other Recent Freddie Mac Transactions: The top 10
loans compose 37.5% of the pool, which is slightly higher than the
Fitch-rated, Freddie Mac, 10-year 2016 YTD and 2015 averages of 35.2%
and 33.2%, respectively. The largest loan in the pool, The Park at
Arlington Ridge, represents 11.2% of the pool, while the second largest
loan, Paseo Villas, represents 3.3% of the pool.

Low Mortgage Coupons: The pool’s weighted average coupon is 3.97%, well
below historical averages and slightly less than the 2016 YTD,
Fitch-rated, 10-year, K-series Freddie Mac average of 4.21%. Fitch
accounted for increased refinance risk in a higher interest rate
environment by reviewing an interest rate sensitivity that assumes an
interest rate floor of 4.5% for multifamily properties, in conjunction
with Fitch’s stressed refinance rates, which were 8.51% on a weighted
average basis.


For this transaction, Fitch’s net cash flow (NCF) was 12.7% below the
most recent year’s net operating income (NOI); for properties for which
a full-year NOI was provided, excluding properties that were stabilizing
during this period). Unanticipated further declines in property-level
NCF could result in higher defaults and loss severities on defaulted
loans and in potential rating actions on the certificates.

Fitch evaluated the sensitivity of the ratings assigned to FREMF
2016-K58 certificates and found that the transaction displays average
sensitivity to further declines in NCF. In a scenario in which NCF
declined a further 20% from Fitch’s NCF, a downgrade of the ‘AAAsf’
certificates to ‘A+sf’ could result. In a more severe scenario, in which
NCF declined a further 30% from Fitch’s NCF, a downgrade of the ‘AAAsf’
certificates to ‘BBB+sf’ could result. The presale report includes a
detailed explanation of additional stresses and sensitivities on page 11.


Fitch was provided with third-party due diligence information from KPMG
LLP. The third-party due diligence information was provided on Form ABS
Due Diligence-15E and focused on a comparison and re-computation of
certain characteristics with respect to each of the 74 mortgage loans.
Fitch considered this information in its analysis and the findings did
not have an impact on the analysis. A copy of the ABS Due Diligence
Form-15E received by Fitch in connection with this transaction may be
obtained through the link contained on the bottom of the related rating
action commentary.


A description of the transaction’s representations, warranties and
enforcement mechanisms (“RWEs”) that are disclosed in the offering
document and which relate to the underlying asset pool is available by
accessing the appendix referenced under “Related Research” below. The
appendix also contains a comparison of these RWEs to those Fitch
considers typical for the asset class as detailed in the Special Report
titled “Representations, Warranties and Enforcement Mechanisms in Global
Structured Finance Transactions,” dated May 31, 2016.

Additional information is available at

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01
Sep 2016)

Criteria for Analyzing Multiborrower U.S. and Canadian Commercial
Mortgage Transactions (pub. 01 Jul 2016)

Criteria for Rating Caps and Limitations in Global Structured Finance
Transactions (pub. 16 Jun 2016)

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

Rating Criteria for Structured Finance Servicers (pub. 01 Jul 2016)

Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S.
Re-REMIC Criteria (pub. 13 Nov 2015)

Related Research

FREMF 2016-K58 — Appendix

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

ABS Due Diligence Form 15E 1

Solicitation Status

Endorsement Policy


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Freddie Mac announces new tools designed to cut mortgage origination costs

Not to be outdone by Fannie Mae’s announcement that it plans to offer lenders “Day 1” representation and warranty relief, Freddie Mac announced Monday that it is planning a series of enhancements to its Loan Advisor Suite designed to cut mortgage origination costs for lenders.

The announcement comes exactly one year after Freddie Mac first introduced the Loan Advisor Suite at last year’s Mortgage Bankers Association‘s Annual Convention.

At the time, Freddie Mac said that the Loan Advisor Suite was a set of integrated software applications designed to give lenders a way to originate and deliver high quality mortgages to Freddie Mac and acquire insight into representation and warranty relief earlier in the loan production process.

Freddie Mac later upgraded the Loan Advisor Suite to provide lenders with “actionable feedback” throughout the loan production process, which is designed to help lenders lend more often and with more confidence.

Now, Freddie Mac enhancing its Loan Advisor Suite, with the aim of helping lenders’ bottom line at a time when mortgage origination costs are still much higher than historical norms.

Freddie Mac said these new tools, which will be available in spring 2017, will reduce costs for lenders and provide greater certainty and valuable insights throughout the loan production process.

Freddie Mac said that the Loan Advisor Suite will now offer the following:

  • A no-cost automated appraisal alternative
  • Automated borrower income verification
  • Automated borrower asset verification
  • Automated assessment of borrowers without credit scores

Freddie Mac said that it also expects that Loan Advisor Suite will “broadly offer” collateral representation and warranty relief in early 2017, which is intended to “significantly relieve” mortgage lenders from the risk of loan repurchase due to appraisal defects.

Currently, Freddie Mac offers collateral representation and warranty relief in select circumstances, the government-sponsored enterprise said.

“These powerful enhancements are indicative of the dramatic changes happening in financial services globally,” said David Lowman, executive vice president of Freddie Mac’s single-family business. “As the cost of originating a mortgage has more than doubled since before the financial crisis, we’re collaborating with lenders to create innovative tools that reduce the costs of producing and selling high-quality loans to us.”

Freddie Mac said that these new tools provide automation and transparency in the loan production process, because Loan Advisor Suite assesses credit, capacity, and collateral to help lenders validate the quality of the loans they originate.

“We have more than 40 years of historical data that provides the foundation of Loan Advisor Suite,” said Andy Higginbotham, senior vice president of strategic delivery for Freddie Mac’s single-family business. “By pairing big data with advanced analytics, we’re creating efficiencies and reducing costs for lenders and borrowers.”

Task named Realtor of the Year

Seth Task of Berkshire Hathaway Home Services in Solon was named Realtor of the Year at the annual meeting of the Akron Cleveland Association of REALTORS on Oct. 19.

“I am just truly overwhelmed,” said Task, a Solon resident. “I love what I do, and more importantly, I love giving back to the industry. Our country was built on the dream of homeownership, and to me nothing is more important than protecting that. My dad is smiling down on me today!”

The organization has more than 5,500 members.

In 2014, Task served as president of the board of directors of the local organization and was vice chair of the federal financing and housing policy committee for the National Association of REALTORS.

Grant to Ithaca Realtors to support housing summit

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Arizona Association of REALTORS Hosts "Ask a REALTOR" Hotline …

Arizona Association of REALTORS® is a paid advertiser of Sonoran Living

The Arizona Association of REALTORS® (AAR) is hosting its annual FREE Ask A REALTOR® Hotline on October 25, 2016 from 9 a.m. to 3 p.m. As top industry experts, Arizona REALTORS® are uniquely equipped to address consumer questions and direct callers to additional resources as appropriate. “This is just another way Arizona REALTORS® are committed to helping the community,” said AAR 2016 President Paula Serven. “Home buying and selling can become complicated and our members are dedicated to guiding consumers along the process.”

Buyers, sellers and renters from around the state can call 602-351-2444 to have their questions addressed by experienced, licensed REALTORS®. Top questions from last year’s hotline included:

·    Why should I use a REALTOR®?
·    How do I get my home ready for the market?
·    What should I look for when buying a home?
·    How much home can I afford?
·    What should I disclose before selling?
·    What rights do I have as a renter/landlord?

As the largest trade associations in the state, AAR is dedicated to educating consumers on homeowner incentives, the buying and selling processes and more. If you miss the hotline, answers to some of the most frequently asked questions will be posted online at:

The Arizona Association of REALTORS® represents more than 44,000 Arizona REALTORS® who hold active real estate licenses and subscribe to a strict Code of Ethics and Standards of Practice established by the National Association of REALTORS®. In addition to providing a number of member benefits and services including risk management, education and a legislative voice, AAR is dedicated to the protection of private property rights for all Arizonans.

Arizona Association of REALTORS® is a paid advertiser of Sonoran Living

Fannie Mae to Introduce Time-Saving Paperless Income and Employment Verifications from Equifax® Into its DU …

The Work Number, which includes payroll records from more than 6,600 employers nationwide, including more than 75% of the Fortune 500 and the majority of federal government civilian employers, is a proven verifications solution in the mortgage industry. For those applicants whose information is not available in the database, Equifax will supplement the process with its manual verification service.  Additionally, the IRS tax transcript fulfillment service allows lenders to retrieve tax transcripts providing added data around a consumer’s additional sources of income.

“We recognize that the trajectory of the mortgage industry directly corresponds with the increasing demand for a frictionless origination process,” said Craig Crabtree, general manager of Equifax Mortgage Services. “Equifax is uniquely positioned to provide lenders with employment and income data that will help increase transparency and create a streamlined experience that coincides with today’s expectations for expediency.”

For more information, visit:

About Equifax
Equifax powers the financial future of individuals and organizations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge that helps its customers make informed decisions. The company organizes, assimilates and analyzes data on more than 800 million consumers and more than 88 million businesses worldwide, and its databases include employee data contributed from more than 6,400 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard Poor’s (SP) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,200 employees worldwide.

Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015). For more information, visit

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SOURCE Equifax Inc.

Related Links

Greystone Provides $31 Million Fannie Mae DUS® Loan in …

NEW YORK, Oct. 24, 2016 (GLOBE NEWSWIRE) — Greystone, a real estate lending, investment and advisory company, today announced it has provided a $31,000,000 Fannie Mae Delegated Underwriting and Servicing (DUS®) loan for the permanent takeout of a construction loan on The Henry in Tacoma, WA. The loan was originated by Tom Meunier of Greystone’s Newport Beach, CA office.

The Henry’s refinancing, executed through a Fannie Mae DUS® loan, is a 7/6 adjustable rate mortgage with a 30-year term. The Henry is a newly constructed Class-A mid-rise building comprising 161 residential units with six floors. Offering ground-level commercial space, the property is ideally situated along the Tacoma Foss Waterway with convenient access to the area’s restaurants, museums and shopping. The Henry’s amenities include a resident lounge, fitness center, picnic area/courtyard, and dog park.

The borrowing entity felt the 7/6 product provided them the best execution and most flexible loan terms for their current financing situation.

“The Henry is a pristine mixed-use building offering luxury waterfront living in the Tacoma market. The building will also receive its green certification in the coming year, signaling to tenants and the market that the building is financially and environmentally responsible,” said Tom Meunier.

About Greystone
Greystone is a real estate lending, investment and advisory company with an established reputation as a leader in multifamily and healthcare finance, having ranked as a top FHA and Fannie Mae Affordable lender in these sectors. Our range of services includes commercial lending across a variety of platforms such as Fannie Mae, Freddie Mac, CMBS, FHA, USDA, bridge and proprietary loan products. Loans are offered through Greystone Servicing Corporation, Inc., Greystone Funding Corporation and/or other Greystone affiliates. For more information, visit

Karen Marotta

Fannie Mae streamlines U.S. mortgage underwriting | Reuters

NEW YORK Fannie Mae said on Monday it has launched a program to streamline its underwriting on mortgages for some borrowers that uses electronic data instead of physical proof of their income, assets and employment.

The U.S. government mortgage agency said the “Day 1 Certainty” program would also offer relief from representation and warranty for the appraised value of a home and a waiver of its property inspection requirement for many mortgage refinancings.

“Together, these innovations deliver greater speed, simplicity, and certainty to lenders and borrowers. They also bring stronger risk management and promote greater digitization of data and processes to the mortgage industry,” said Timothy Mayopoulos, Fannie Mae’s president and chief executive officer, in a statement.

These program features will be available on Dec. 10, Fannie Mae said.

Fannie Mae and Freddie Mac finance mortgages made by lenders by owning them and guaranteeing the bonds backed by these loans.

(Reporting by Richard Leong; Editing by Meredith Mazzilli)

BRIEF-Freddie Mac expects gradual rise in mortgage interest rates into 201…

Oct 20 Federal Home Loan Mortgage Corp

* Freddie Mac October 2016 outlook

* Don’t expect much increase in total home sales going
forward with a slight decline in seasonally-adjusted sales in Q4

* “Even if worldwide bond yields recover to pre-Brexit
status quo, mortgage interest rates are likely to remain low for
an extended period”

* Expect a gradual rise in mortgage interest rates
throughout remainder of 2016 and into 2017

* Forecasting house prices will grow at a 5.6 percent annual
rate in 2016, moderating to 4.7 percent in 2017

* Mortgage activity, which benefited from low mortgage rates
post-brexit, starting to see slowdown in refinance activity that
will persist into next year

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When it comes to real estate, the ultra-wealthy are still in a buying mood

Despite the chill winds of a softening luxury real estate market and political uncertainty across the globe, it’s still a buyer’s market for the ultra-wealthy, a recent survey suggests.

In partnership with the YouGov Affluent Perspective, Luxury Portfolio International surveyed the top echelon of consumers across 12 countries, finding that the majority of those consumers were “cautious but optimistic” in the face of an uncertain and often turbulent world economy.

To be sure, the ranks of the ultra-wealthy, those with more than $50 million or more in net worth, have swelled. Research from Credit Suisse showed that there are more than 123,000 individuals in this category, a whopping 53 percent jump in just five years. Most of them reside in North America, where the rate of growth among the super-rich is double that of Asia and significantly faster than Europe’s.

Although high-end real estate has softened — sales of homes priced above $1 million have tumbled recently, according torecent National Association of Realtors (NAR) figures — high-net worth individuals “feel good about their lives, are confident about their decisions and have a very strong intent to purchase real estate,” the report’s authors wrote.

As such, real estate is still in demand for the economic elite, but varied somewhat depending on their location.

The YouGov survey found that 25 percent of the wealthy were looking to purchase new property over the next three years, with 18 percent looking to sell. Outside teh U.S., the mood was far more confident: 45 percent of wealthy buyers are looking to purchase real estate with only 23 percent looking to sell, the data showed.

The report showed that “nearly 1 in 4 of the Global Top 1 percent plans to make a real estate purchase in the next three years, with almost as many considering selling as well.”

The YouGov survey is consistent with what Philip White, president and CEO of Sotheby’s International Realty Affiliates, told CNBC in an interview last month. He said high-end real estate was “sort of a mixed bag, and obviously there is some slowing,” but some locations were faring better than others.