Page 46 - The GSE Report March-April 2018

F R E D D I E M A C M JA AR N. U- A A RP YR . 2 20 01 18 8
Freddie Mac transfers mortgage risk to private investors in most recent loan transactions
On April 25, 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, the fourth SLST since the launch of the program in 2016. This transaction marks the first time a Freddie Mac created trust will be the issuer of the SLST securitization.
The SLST pool is primarily comprised of loans that were modified to assist borrowers who were at risk of foreclosure to help them keep their homes, which includes re-performing and moderately delinquent loans that are serviced by Nationstar Mortgage LLC, d/b/a Mr. Cooper.
This SLST transaction will involve a two-step process. First, an auction of the right to purchase the subordinate non-guaranteed certificates via a competitive bidding process subject to the terms set forth in a securitization term sheet will be held. The winning bidder will be chosen on the basis of economics, subject to meeting Freddie Mac’s internal reserve levels. Second, the trust will securitize the loans and issue both senior and subordinate certificates. Freddie Mac will guarantee and initially retain the senior certificates issued from such securitization. The winner of the auction will purchase the subordinate certificates at closing. (Press Release, Freddie Mac, 04/25/18)
On March 29, Freddie Mac announced the sale via auction of 113 deeply delinquent non- performing loans (NPLs) to VRMTG ACQ, LLC, a minority woman-owned business. The sale is part of Freddie Mac’s Extended Timeline Pool Offering (EXPO®) to potential bidders, including minority and women-owned businesses (MWOBs), non-profits, neighborhood advocacy funds and private investors active in the NPL market. The transaction is expected to settle in May 2018.
The NPL loans have been delinquent for over two years, on average, and the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation. Mortgages that were previously modified and subsequently became delinquent comprise approximately 65% of the pool balance. The pool is geographically diverse and has a loan-to-value ratio of approximately 113 percent, based on Broker Price Opinion (BPO). (Press Release, Freddie Mac, 03/29/18)
On March 20, Freddie Mac priced two credit risk transfer offerings as part of the Structured Agency Credit Risk (STACR®) series. The offerings, STACR HQA1 and STACR SPI1SM, are the first offerings for each series in 2018:
© 2018 by Canfield Press, LLC. All rights reserved. www.canfieldpress.com 46