Vericrest Financial is planning to price a private residential mortgage backed securitization collateralized by non-performing loans, according to sources.

Vericrest declined to comment on the deal.

If successful, Standard & Poor's estimates total private-label RMBS issuance will be near $5 billion this year, compared with $2.8 billion for all of 2011.

"There’s been a fair amount of non-rated legacy RMBS deals done this year," said one source, commenting on the deal. "BofA in NY has done most of them." 

The Vericrest loans are believed to be resecuritized from either the Vericrest Opportunity Loan Trust 2011-NPL2 or Vericrest Opportunity Loan Trust 2011-NPL3.

The unpaid principal balance in total is $363 million, with 1,500 units in the collateral pool.

72% of those are said to be in some stage of foreclosure, and another 257 units are already REO.

"They created a new senior bond with the same collateral out of the mezzanine pieces they held," said another source, who downplayed the importance. "It’s just a liquidity play."