Freddie Mac prices $284.2 million SLST securitization amid market challenges

On May 21, 2025, Freddie Mac, a government-sponsored enterprise in the United States, announced the pricing of the Freddie Mac Seasoned Loans Structured Transaction Trust (SLST) Series 2025-1. This transaction involves the securitization of approximately $284.2 million, which includes both guaranteed senior and non-guaranteed subordinate securities backed by a pool of seasoned residential mortgage loans. The SLST program aims to manage less-liquid assets within Freddie Mac's mortgage-related investment portfolio and address credit and market risks through economically viable transactions. The structure of the transaction comprises around $262.9 million in guaranteed senior certificates and approximately $21.3 million in non-guaranteed subordinate certificates. The subordinate certificates were actually auctioned and awarded on May 19, 2025, indicating strong market interest. Set to settle on May 28, 2025, the underlying collateral for these securities consists of 1,891 seasoned loans, which include fixed, adjustable, and step-rate loans. Notably, the pool includes loans that have been modified to support borrowers at risk of foreclosure, alongside loans that have not received any modifications. As of the cut-off date, none of the loans featured in this securitization are more than 150 days delinquent, which speaks positively to the overall quality and performance of the underlying assets. The servicing of these loans will be conducted by Select Portfolio Servicing, Inc., ensuring that proper oversight and management is conducted, aiming to enhance borrower outcomes and stabilize communities impacted by these loans. Freddie Mac's seasoned loan offerings focus on reducing the less-liquid portions of its portfolio. Since 2011, the organization has sold approximately $10.4 billion worth of non-performing loans (NPLs) and securitized around $80.3 billion of re-performing loans (RPLs). With the SLST program being a vital aspect of this strategy, Freddie Mac hopes to continue its commitment to promoting liquidity, stability, and affordability within the housing market, especially during fluctuating economic conditions. This transaction marks a continuation of Freddie Mac's efforts to engage in economically reasonable financial activities that benefit both the company and consumers alike.