In a bid to raise badly-needed liquidity, subprime specialist Delta Financial reported this morning that the lender has priced a securitization backed by $900 million in mortgage loans originated by the company. Pricing was not disclosed, although the company described the execution as "materially less favorable than in past quarters." From the press statement:
“Pricing this securitization was paramount for our Company in light of the rapid deterioration in the credit markets,� explained Hugh Miller, president and chief executive officer. “This securitization removes the majority of the loans from our warehouse lines which greatly reduces our exposure on these facilities. We structured this transaction as a Real Estate Mortgage Investment Conduit (REMIC) gain-on-sale securitization, in which we sold all the bonds and intend to sell the residual interest. As such, we will account for this transaction as a sale and not as a financing.�
A review of the prospectus materials shows Wells Fargo as master servicer and Ocwen Loan Servicing, LLC as primary servicer. Nonetheless, it's worthwhile to note that a deal like this is even getting done at all.