Freddie Mac announced Tuesday that it completed the previously announced sale of approximately $292 million in previously modified loans from its investment portfolio to Towd Point Master Funding.

This sale included 1,262 seasoned re-performing loans and moderately delinquent loans that are currently serviced by Select Portfolio Servicing.

The pool of loans is comprised of fixed- and step-rate modified seasoned mortgages with an average loan balance of $231,100. The loans carry a loan-to-value ratio of approximately 101%, based on Broker Price Opinions.

According to Freddie Mac, these loans were previously modified to help borrowers who were at risk of foreclosure.

The loans were sold as part of Freddie Mac’s Seasoned Loan Structured Transaction program, which is designed to reduce Freddie Mac’s less liquid assets in its mortgage-related investments portfolio and shed credit and market risk via “economically reasonable” transactions.

Now that the loan sale is complete, the second phase of the Seasoned Loan Structured Transaction program begins.

In the second step of the program, the purchaser of the loans (Towd Point Master Funding, in this case) will securitize the loans.

Freddie Mac will then guarantee and purchase the senior tranche of the securitization, while Towd Point Master Funding will retain the first loss subordinate tranche.

According to Freddie Mac, a key requirement of these types of deal is that the buyer of the loans, and therefore the subordinate tranche, be an investor with substantial experience in managing both performing and moderately delinquent mortgage loans as well as securitizing mortgage loans.

Now, that process moves forward.