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Freddie Mac: $2.4B Reperforming Loan Securitization Announced

Freddie Mac announced its second Seasoned Credit Risk Transfer (SCRT) of 2019, offering a rate securitization of around $2.4 billion.

The rate includes both senior and unguaranteed subordinate securities back by seasoned reperforming loans (RPLs).

“The SCRT securitization program is a fundamental part of Freddie Mac's seasoned loan offerings, which reduce less liquid assets in its mortgage-related investments portfolio and sheds credit and market risk via economically reasonable transactions,” the GSE stated in the release.

According to the release, the most recent SCRT includes approximately $2.2 billion in guaranteed senior risk certificates and around $247 million in unguaranteed mezzanine and subordinated certificates.

Freddie Mac expects the transaction to be settled on Wednesday, May 15.

To assist borrowers who were at risk for foreclosure and help them remain in their homes, the underlying collateral consists of the modification of 12,406 fixed-and-step-rate, seasoned RPLs. 

Freddie Mac reported on its foreclosure prevention activity in its Q1 2019 financial update, and according to the Federal Housing Finance Agency, both Fannie Mae and Freddie Mac completed 13,589 foreclosure prevention actions in January. The GSE’s have completed more around 4.3 million foreclosure actions since the start of conservatorship in September 2008.

The RPLs are serviced by Select Portfolio Servicing, Inc, with assistance from Citigroup Global Markets Inc. and Nomura Securities International, Bank of America, Merrill Lynch, BMO Capital Markets Corp., Credit Suisse Securities LLC, Wells Fargo Securities LLC and The Williams Capital Group, L.P.

In 2019 Freddie Mac has sold $8 billion on non-performing loans and securitized more than $50 billion of RPLs.

Freddie Mac reported an income of $1.7 billion in its financial update.

“Our guarantee book of business over the prior year grew 5 percent, demonstrating our heightened competitiveness, and credit quality remains strong,” said Freddie Mac CEO Donald H. Layton. “We also delivered on our mission, making home possible for nearly 450,000 families. These results demonstrate how the transformed Freddie Mac today is a well-run financial institution that produces solid earnings, serves its customers, protects taxpayers and fulfills its mission."

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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