Nearly $200 million in residential agency loans that have been previously modified are being sold for subsequent securitization.
The offering involves $199 million in loans that had been payment-option adjustable-rate mortgages
and had loan modifications.
A majority of the mortgages either have payment histories that are less than six months current or are moderately delinquent.
The loans are being offered by Freddie Mac, which currently holds them in its $326 billion investment portfolio.
After the sale is complete, the loan purchaser will securitize the loans.
“Freddie Mac will guarantee and purchase the senior tranches of the securitization,” the McLean, Virginia-based firm explained. “Freddie Mac may retain or sell the guaranteed senior tranches. The first loss subordinate tranche will be initially retained by the loan purchaser.”
The successful bidder must be
an investor with substantial experience managing high-risk mortgages and securitizing.
Freddie said it has
securitized around $24 billion so far through its guaranteed re-performing loan securitization program, while it has sold $4.3 billion to date in non-performing loans.
The mortgages are currently being serviced by JP Morgan Chase Bank, N.A.
Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and First Financial Network Inc. are serving as advisors to Freddie in the transaction.
