Fannie Mae and Freddie Mac leak tips off US banks to Harp loans ©Corbis Bright lights of Las Vegas: refinancing applications in the state of Nevada quadrupled in the year to June Fannie Mae and Freddie Mac have inadvertently tipped off US banks and other big mortgage investors to more loan data than the two housing groups intended, resulting in some of the banks using the information released to identify and analyse Harp loans. The two US mortgage finance groups have been told by their regulator, the Federal Housing Finance Agency (FHFA), to release data on the home loans they guarantee in an effort to encourage private investors to assume more of the risk in the mortgage market. The loan data cover credit performance for more than 30m single-family mortgages, but exclude information on non-standard loans such as those financed under the government's home affordable refinance programme. But the swift interpretation of the data by some of the banks highlights the financial industry's increasingly sophisticated ability to digest large volumes of so-called "big data." "You could figure out which loans were Harp," Kevin Atteson, of Morgan Stanley's mortgage trading team, said at the "big data finance" conference in New York. Pinpointing Harp loans is valuable for mortgage investors and traders since it helps identify loans which may face more obstacles to refinancing. US homeowners who qualify for the programme are only allowed to refinance using Harp once. Morgan Stanley is believed to have used a sophisticated "matching engine" to identify Harp refinanced loans through the released credit performance data. "The agencies have tried to eliminate the easy matching attributes," said Steven Abrahams, mortgage analyst at Deutsche Bank. But you could work around that with fair accuracy. If the released loans exclude Harp, then whatever isn't matched, with some qualifications, should be Harp. As in other industries, "big data" has become a buzzword among financial groups who are seeking to mine reams of new information to gain an edge in the market. Freddie has historically shared delinquency data for pools of mortgages but not individual loans, while Fannie did not release any type of credit data. "We are aware of recent research pieces where analysis has been performed on Harp loans as a result of the single-family loan-level data set release," Freddie said. Freddie Mac can provide no assurances regarding the accuracy of such mapping. The new data released by the mortgage groups come in files so big that Fannie and Freddie recommend would-be downloaders use specialised "database management systems" to access it. The agencies say that releasing the data will lead to better modelling of the risks involved in investing in such loans. The FHFA has said it expects Fannie and Freddie this year to each share the risk of about $30bn of unpaid mortgages with private investors. The risk-sharing is part of an attempt to reduce the role of the two taxpayer supported companies in the mortgage market, where they still guarantee the vast majority of US home loans. "The choice of the items included in the [recently released] data release gives some information on the risk-sharing structures that are being contemplated," Laurie Goodman, a mortgage specialist at Amherst Securities, wrote in a report.