At once extolling the strong performance of Freddie Mac's current loan portfolio, then suggesting government backing of mortgages should shrink considerably, Charles "Ed" Haldeman, chief executive officer of Freddie Mac, told an audience at Plano, Texas--based Housing Wire's REthink Symposium, held in Pinehurst, North Carolina, in May, that the average FICO[R] (credit) score in Freddie's loan portfolio in the first quarter of 2011 was a relatively high 752 and the average loan-to-value (LTV) ratio also was low at 68 percent. Yet, Haldeman said the market needs "to get government mortgage financing back [down] to 40 percent" of originations and referenced the lower government-sponsored enterprise (GSE) loan limit of $635,500, coming Oct. 1, as one way to achieve that. Then he went further, suggesting that "maybe [the funding ceiling] should be lower." Freddie Mac's Haldeman added, "The G [guarantee] fee has to go up in a material way to get private capital back" into the market. On other headline topics, the Freddie Mac executive called the GSE white paper--issued earlier this year by the U.S. Treasury Department on the future of the government-sponsored enterprises--"a little disappointing" and opined that the Home Affordable Modification Program's (HAMP's) major problem "was promising too much in early 2009, when there were predictions [from the administration] of 4 million loan modifications."
