Freddie Mac announced an approximate $497 million Seasoned Loan Structured Transaction (SLST) of a pool of seasoned re-performing loans from its mortgage-related investments portfolio.
To date, Freddie Mac has sold $7 billion of non-performing loans and transacted $38 billion of RPLs consisting of (i) $27 billion via fully guaranteed PCs, (ii) $10 billion via Seasoned Credit Risk Transfer (SCRT) securitizations, and (iii) $1 billion via Seasoned Loan Structured Transaction (SLST) offerings.
Freddie Mac today announced its second Freddie Mac Seasoned Loan Structured Transaction (SLST) -- via an auction of 1,262 seasoned re-performing loans (RPL) and moderately delinquent loans serviced by Select Portfolio Servicing, Inc.
The SLST securitization program is a key part of Freddie Mac's seasoned loan offerings initiatives, which are designed to reduce less liquid assets in its mortgage-related investments portfolio and shed credit and market risk via economically reasonable transactions.
The transaction is a two-step structured sale of seasoned loans. The initial step involves the sale of loans via a competitive bidding process, subject to a securitization term sheet.
The collateral is comprised of fixed- and step-rate modified seasoned loans. These loans were modified to assist borrowers who were at risk of foreclosure to help them keep their homes.
This likely reflects the gradual impact of new loans' lower spreads as they replace more seasoned loans
in the portfolios, as well as prevalence of smaller, traditional MM loans in these MM CLOs.
* Limiting the GSEs financing activities to loans that only provide new liquidity (versus the purchase of seasoned loans
or loan pools), loans that can be securitized or loans for underserved market segments.
The loan portfolio consists of seasoned loans
originated before 2009.