As part of its ongoing effort to transfer mortgage credit risk away from taxpayers and into the private market, Freddie Mac recently completed its second Seasoned Credit Risk Transfer offering – a rated securitization of approximately $1.12 billion of both guaranteed senior and unguaranteed subordinate securities.
More specifically, the deal includes the issuance approximately $926 million in guaranteed senior certificates and approximately $190 million in unguaranteed mezzanine and subordinate certificates.
The collateral backing the certificates are 4,361 fixed- and step-rate modified seasoned loans. These loans were modified to assist borrowers who were at risk of foreclosure to help them keep their homes and have all been performing for at least 12 months as of issuance, the company says in a press release.
The loans will be serviced by Select Portfolio Servicing Inc., which will service them in the same careful and thorough way that a pool of non-performing loans would be serviced.
To date, Freddie Mac has sold about $7 billion in nonperforming loans, securitized about $26 billion in re-performing loans and transacted about $2 billion in structured offerings as part of its effort to get more distressed assets off its books.