Freddie Mac to Securitize Previously Delinquent Mortgage Loans That Have Been Reinstated to Performing Status
Mortgage loans from company's mortgage-related investment portfolio will be pooled into new Freddie Mac PCs
MCLEAN, Va., Nov. 17, 2011 /PRNewswire/ -- Freddie Mac (OTC: FMCC) announced today that it will begin securitizing certain mortgage loans that previously were delinquent and that the company had purchased from its related Mortgage Participation Certificate (PC) pools. These mortgage loans have been reinstated to current, performing status and have not been modified.
Beginning in November 2011, these reinstated loans, which Freddie Mac holds in its mortgage-related investment portfolio, will be pooled into new Freddie Mac PCs with the new "R" prefix. Reinstated loans must be current at least four consecutive months at the time of securitization into pools with the "R" prefix. For the initial securitization this month, Freddie Mac has elected to securitize reinstated loans that have been current for at least 12 consecutive months. These PCs may back new Freddie Mac REMIC and Giant securities in the future.
Freddie Mac has purchased a significant number of delinquent mortgage loans from PC pools and held those loans in the company's mortgage-related investment portfolio. Freddie Mac continues to pursue resolutions of the delinquencies while these loans are held in the portfolio.
"By securitizing mortgage loans that were delinquent but reinstated to performing status, Freddie Mac will provide additional needed liquidity to the market using our traditional mortgage security vehicles," said Mark Hanson, Freddie Mac vice president, Securitization and Cash Execution. "This new avenue for securitization also will provide more flexibility for Freddie Mac to manage its mortgage-related investment portfolio."
"This capability represents an important step in Freddie Mac's disposition strategy for its distressed asset portfolio," said Adama Kah, Freddie Mac vice president, Distressed Assets Management. "These securitizations will achieve the key goals of developing liquidity, flexibility and scalability while conserving value for the taxpayer."
This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission ("SEC") on February 24, 2011, and all documents that Freddie Mac files with the SEC pursuant to Section 13(a), 13(c) or 14 of the Securities Exchange Act of 1934, excluding any information "furnished" to the SEC on Form 8-K.
Freddie Mac's press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2010, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. www.FreddieMac.com
SOURCE Freddie Mac
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