Freddie Mac Will Securitize Previously Delinquent Loans

Freddie Mac Will Securitize Previously Delinquent Loans Freddie Mac has announced that it will begin securitizing certain mortgage loans that previously were delinquent and that the company had purchased from its related Mortgage Participation Certificate (PC) pools. According to the government-sponsored enterprise, these mortgage loans have been reinstated to current, performing status and have not been modified.

The reinstated loans, which Freddie Mac holds in its mortgage-related investment portfolio, will be pooled into new Freddie Mac PCs with the new ‘R’ prefix. Reinstated loans must be current at least four consecutive months at the time of securitization into pools with the ‘R’ prefix. For the initial securitization this month, Freddie Mac has elected to securitize reinstated loans that have been current for at least 12 consecutive months.Â

‘By securitizing mortgage loans that were delinquent but reinstated to performing status, Freddie Mac will provide additional needed liquidity to the market using our traditional mortgage security vehicles,’ says Mark Hanson, Freddie Mac's vice president of securitization and cash execution. ‘This new avenue for securitization also will provide more flexibility for Freddie Mac to manage its mortgage-related investment portfolio.’

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