Freddie Mac has announced the pricing of its second Seasoned Credit Risk Transfer Trust (SCRT) offering of 2022 —a securitization of approximately $536 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 2022-2 includes approximately $492 million in guaranteed senior certificates and $45 million in non-guaranteed mezzanine and subordinate certificates. The mezzanine certificates will be rated. The transaction is expected to settle on September 14, 2022.
The underlying collateral consists of 3,105 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 Select Portfolio Servicing, Inc. 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 J.P. Morgan Securities LLC and Wells Fargo Securities LLC, as co-lead managers and joint bookrunners, and Bank of America Securities, Inc., Citigroup Global Markets Inc., Nomura Securities International, Inc., 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 more than $76 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. Additional information about the company's seasoned loan offerings can be found here.