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""Freddie Mac"":http://www.freddiemac.com plans to re-securitize certain mortgage loans that were previously delinquent but have been reinstated to current, performing status. The new-issue bonds will not, however, include loans that have been modified.
The McLean, Virginia-based GSE says this new avenue for securitization will provide more flexibility for the company to manage its mortgage-related investment portfolio.
[IMAGE] [COLUMN_BREAK]Freddie Mac has purchased large numbers of mortgage loans from Participation Certificate (PC) pools as they became delinquent. The GSE retains these loans in its portfolio to pursue resolutions of the delinquencies.
Loans that have been cured by means other than a modification will now be pooled into new Freddie Mac PCs with the new ""R"" prefix for reinstated.
The GSE expects to make its first offering of reinstated loans later this month.
For the initial securitization, Freddie Mac has elected to securitize reinstated loans that have been current for at least 12 consecutive months. Going forward, mortgages eligible for the ""R"" pooling must be current just four consecutive months at the time of securitization.
""This capability represents an important step in Freddie Mac's disposition strategy for its distressed asset portfolio,"" said Adama Kah, the GSE's VP of distressed assets management.
""These securitizations will achieve the key goals of developing liquidity, flexibility, and scalability while conserving value for the taxpayer,"" Kah added.
