Freddie Mac Begins Securitizing Modified, Performing Loans

""Freddie Mac"":http://www.freddiemac.com/ is in the process of securitizing over $1 billion in performing loans that were modified.

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The loans are pooled into new Freddie Mac fixed rate modified participation certificates (modified PCs), according to a release. The modified loans have been performing for at least six consecutive months and were held in the company's mortgage portfolio.

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The loans are not TBA deliverable and none of the loans were modified through the government's Home Affordable Mortgage Program (HAMP).

""As we continually seek to provide more transparency to the investment community, we are providing additional information on these securities which should aid in their valuation,"" said Neil Hughes, VP and interim head of single family securitization.

The GSE purchased most of the loans out of its related PCs when the loans became at least 120 days past due. Generally, Freddie Mac explained it buys delinquent loans out of the PCs and holds them in its mortgage-related investments portfolio while a resolution is sought.

""Securitizing loans that have been modified and are now performing will allow Freddie Mac to better manage its mortgage-related investments portfolio,"" said Adama Kah, Freddie Mac VP of distressed assets management. ""We are taking another important step that creates liquidity and taxpayer value for these modified loans through PC securitization. Freddie Mac's goal is to help families stay in their homes and provide alternatives to foreclosure.""