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Puerto Vallarta: Is The ‘Mordida’ A Good Idea?

The Mordida For anyone who asks, if ever pulled over by an officer of the law in Puerto Vallarta, we always advise to keep your money in your pocket and take the ticket. There are still come cops who will accept a bribe (mordida), though we ...

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Dreams Do Come True

We purchased a unit in Paramount Bay in April 2016 with the assistance of Dana Scapa a partner of The Dream Team of Puerto Vallarta at Timothy Real Estate Group in Puerto Vallarta. To say that the whole experience was one of the smoothest trans...

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Get Out And Hike Vallarta

Hiking to Las Animas Las Animas is a coastal village that’s lively during the day when tourists swarm the beaches, and quiet at night when residents breathe a sigh of relief until the next morning when they open their welcome arms to peopl...

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Puerto Vallarta: Happy New Year!

İProspero Año! We love New Year's Eve in Puerto Vallarta. Everyone gets in on the act and the fun goes on all night long, with dancing in the streets and endless fireworks. There are so many great venues where you can hang out to say goodb...

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Puerto Vallarta & Maize

Next time you’re on the Malecón in Puerto Vallarta, buying corn on the cob and smothering it in cheese and Salsa Huichol, remember corn, a highly diversified and reliable food source, is a vegetable with a traceable history. You would not be...

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Is It Cheaper Living in Mexico?

Cheaper Living in Mexico We moved to Puerto Vallarta for many reasons and we will readily admit that fixed income was certainly a priority. The weather’s lovely, especially when we have the opportunity to travel to other destinations in an...

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Dia De La Marina, Puerto Vallarta

By TREGROUP · May 11, 2016 Navy Day Some of our favorite holidays in Puerto Vallarta are the less mentioned and mostly attended by locals. Dia de Banderas is one of these, (Flag Day), celebrated in February and given special signific...

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Puerto Vallarta: Sports, Pro or Amateur?

Calling Pros and Amateurs! Puerto Vallarta has long had a history of sports, with enthusiasts for baseball, soccer, tennis, and other activities dating back several decades. These traditions are honored when Puerto Vallarta hosts events, whi...

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Puerto Vallarta: Wash up!

Wash Your Hands We can't be reminded enough of this simple deterrent to the flu and other illnesses, which assault Puerto Vallarta at the same rate as the remainder of the world outside paradise. The initial recommendation is to get an annua...

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Puerto Vallarta’s Fabulous Weather

The change of seasons is upon us. Fall is in the air and soon weather temperatures will drop and cold weather will arrive. More and more Americans and Canadians are spending their winters in Puerto Vallarta Mexico, as it is an ideal “sno...

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Puerto Vallarta – A Food Lover’s Paradise

Puerto Vallarta – A Food Lover’s Paradise Puerto Vallarta is the second most popular destination in Mexico for food culture and restaurants, second only to Mexico City. Visitors and residents will find it hard to find a truly bad ...

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Puerto Vallarta: I Love the Java Jive!

I Love the Java Jive! Puerto Vallarta hosts some grand free events and among them this year is something new and exciting: an attempt to break the Guiness Book of World Records for the greatest number of people tasting coffee at the same tim...

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Puerto Vallarta: Are You Flying With A Laptop?

TSA and Laptops We’ve all heard there are new regulations for traveling with laptops and it seems to have sent a lot of panic to people who depend on their computers for livelihood. We’ve traveled in and out of Puerto Vallarta countl...

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Buyers Ready to Invest in Credit Risk Bonds with Freddie Mac

Freddie Mac

Starting back in July of 2013, Freddie Mac initiated a risk-sharing plan to transfer some amount of their residential mortgages credit-risk exposure from taxpayers. The offering was to attract other sources of capital from the private market, like banks, mutual funds, and insurance companies.

The Structured Agency Credit Worthiness (STACR) debt notes offering has received investment grade ratings from Fitch and Moody’s, and attracted over 50 different investors. Effectively, any investor that bought more than $1 billion in bonds now shares the risk of a portion of losses that could happen if some mortgage borrowers don’t end up repaying their loans.

Freddie Mac is back with another installment (third) of its risk-sharing deals under mortgage credit securitization platform. So far, these credit-risk deals have received an excellent response from the investors and the government enterprise is ready to come up with similar deals in future.

The past few months have witnessed an increase in the investor pool planning to invest in these government bonds. We can expect a regular issuance of similar deals throughout this year and the government plans to increase the credit risk on private investors in small installments.

Key Points of Third Risk-Sharing Deals

  • More than 65 investors are now participating in this offering.
  • Single-A Rated Class Pricing: one-month LIBOR with 100 basis points
  • Triple-B Rated Class Pricing: one-month LIBOR with 220 basis points
  • Unrated Class Pricing: one-month LIBOR with 450 basis points

The most interesting fact is the introduction of three different bonds in the STACR 2014 series with the target to offer additional protection to Freddie Mac and offer healthy combination of products. Freddie Mac anticipates that these product mixtures are among the primary reasons for better response from investors (20+ investors). The earlier offering in 2013 had two different types of product investment options.

The STACR 2014 series has offered better investing flexibility to the investors with an option to exchange between these three classes. It is possible to combine pro-rata components of each of the individual cash flows. At the same time, investors can divest interest from any of these classes and create more bonds with individual margins.

The third installment of risk-sharing deals, STACR 2014, constitutes of 140,000 residential loans with $32.4 Billion in principal balance (unpaid). The 30-year fixed-rate single-family mortgages purchased by Freddie Mac during the second quarter of 2013 are among the subset of this STACR pool.

Transferring Risk good for Taxpayers?

This isn’t the first time Freddie Mac has tried it’s hand at raising capital in the private sector. Over the past 5 years they have been successful at bringing in more than $64 billion dollars through a multi-family K-Deal program. This makes them one of the largest issuers of multifamily structured debt in the US capital markets, putting the overwhelming majority of risk onto the private capital investors that purchase their bonds.

Related: Freddie Mac Housing Report: What’s In-Between the Lines?

What do you think? Is this innovate and forward-thinking of Freddie Mac to transfer the risk off the government and into the private sector? Or is it spelling trouble to not have government more government oversight involved?

The post Buyers Ready to Invest in Credit Risk Bonds with Freddie Mac is property of The BiggerPockets Blog. and is Copyright

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Puerto Vallarta: USA Election Question

Why Does Mexico Care? There are many reasons the election is of great interest to Mexico and lately it seems like every dinner discussion in Puerto Vallarta centers around the upcoming US election. Over 34 million people of Mexican origi...

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Valentine’s Day in Puerto Vallarta

Luckily for many of us, just being in Puerto Vallarta says it all for Valentine’s Day!  But, if you really want to enjoy, relax and dazzle your friend, partner, husband or wife, please allow me to give  you a few tips or recommendations for...

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Vallarta: It’s Time You Learn More About Litibu

Litibú At exactly the same latitude as the Hawaiian Islands, the curious traveler will find the settlement of Litibú, north of Puerto Vallarta. After having lived in Puerto Vallarta for several years, we’d never heard of Litibú until on...

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