Freddie Mac Begins Creating Bonds Backed by Modified Mortgages

Freddie Mac, the government-controlled mortgage financier, said that it’s begun packaging modified home loans into bonds that it guarantees, with $1 billion of securitizations already completed.

The “vast majority” of the mortgages reworked to help homeowners had previously been contained in its bonds and were bought out after delinquencies, the McLean, Virginia-based company said today in an e-mailed statement. Since November 2011, the firm has been repackaging into bonds those loans that were once delinquent and began performing again without modifications, it said.

“Securitizing loans that have been modified and are now performing will allow Freddie Mac to better manage its mortgage-related investments portfolio,” Adama Kah, a vice president of distressed assets management, said in the statement. “We are taking another important step that creates liquidity and taxpayer value.”

To contact the reporter on this story: Jody Shenn in New York at

To contact the editor responsible for this story: Alan Goldstein at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.