Freddie Mac launched the process of securitizing $1 billion performing Home Affordable Modification Program (HAMP) loans that were once at risk of foreclosure, but are now in good standing after going through the government's HAMP program.

The Treasury launched HAMP back in March 2009, and has since helped 229,000 borrowers, giving them permanent modifications on Freddie-Mac-owned loans.

The HAMP securitizations include modified loans that are "reperfoming into Freddie Mac Mortgage Participating Certificates."

This process allows the GSE to create more liquidity as well as transparency when it comes to the pricing for HAMP loans, said Adama Kah, Freddie Mac’s vice president of distressed assets management.

"This initiative clears the path for securitizations of larger portions of the distressed assets portfolio and will lead to new, additional investment options for investors," added Kah.

Modified Freddie loans are only eligible for securitization if they are current for at least six consecutive months at the time of issuance. A large majority of HAMP loans are step-rate mortgages, Freddie explained.

The GSE further noted that step-rate HAMP loans can be pooled into Freddie’s Modified Step Rate PCs, which feature the new 'HA-HD' prefixes.

"Performing HAMP modified loans that are fixed-rate and do not have the step-rate feature will be securitized into the existing Freddie Mac Modified Fixed Rate PCs with ‘MA-MD’ prefixes (introduced in May 2013)," Freddie added. "Loans securitized with the ‘HA-HD’ and ‘MA-MD’ prefixes are not TBA deliverable. The PCs are eligible collateral for new Freddie Mac Giant PC securities."

Freddie will offer pool-level and loan-level disclosures on the modified fixed-rate PCs and modified step rate PCs, complimenting existing information already disclosed.

The GSE also plans to give pool-level information on payment history covering up to 36 months prior to issuance.