Freddie Mac has priced its first Seasoned Credit Risk Transfer Trust (SCRT) offering of 2023 – a securitization of approximately $471 million including both guaranteed senior and non-guaranteed subordinate securities backed by a pool of seasoned re-performing loans (RPLs). The SCRT program is a fundamental part of Freddie Mac’s seasoned loan offerings which reduce less liquid assets in its mortgage-related investments portfolio and shed credit and market risk via economically reasonable transactions.
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2023-1 includes approximately $443 million in guaranteed senior certificates and $28 million in non-guaranteed mezzanine and subordinate certificates. The mezzanine certificates will be rated. The transaction is expected to settle on August 10, 2023.
The underlying collateral consists of 2,788 seasoned fixed-, step-, and adjustable-rate RPLs, and includes both loans that were modified to assist borrowers at risk of foreclosure and loans that were never modified. On the closing date, the assets of the Trust will consist of seasoned, re-performing mortgage loans that, as of the cut-off date, are either current or no more than 30 days delinquent under the MBA Method.
On and after the closing date, the mortgage loans will be serviced by NewRez LLC, d/b/a Shellpoint Mortgage Servicing and Specialized Loan Servicing LLC and will be serviced in accordance with requirements that, in the event of default, prioritize borrower retention options and promote neighborhood stability.
Advisors to this transaction are Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as co-lead managers and joint bookrunners, and BofA Securities, Inc., Wells Fargo Securities, LLC, and Academy Securities, Inc. (a service disabled veteran-owned business), as co-managers.
To date, Freddie Mac has sold over $9.7 billion of non-performing loans (NPLs) and securitized approximately $77 billion of RPLs consisting of over $30 billion of fully guaranteed PCs, $34 billion of SCRT senior/sub securities, and $12 billion of seasoned loans structured transaction (SLST) securities.Image
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