Mortgage giant Freddie Mac (OTCBB:FMCC) announced today that it started creating bonds supported by certain performing modified mortgage loans held in the company’s mortgage-related investment portfolios.

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Freddie Mac (OTCBB:FMCC) already completed $1 billion of securitization. According to the government-controlled mortgage financier, the loans were modified to help borrowers who were at risk of foreclosures to stabilize markets and prevent losses. Freddie Mac emphasized that loans should be current for at least six consecutive months to be eligible for securitization.

Freddie Mac Repackaging Into Bonds

Since November 2011, Freddie Mac (OTCBB:FMCC) had been repackaging into bonds and mortgages that were previously delinquent, but started to perform again without modification. The company said a “vast majority” of mortgages were modified to help homeowners out of delinquencies. The loans were at least 120 days delinquent, and it is a policy of the company to purchase the delinquent loans and hold then in a mortgage-related investments.

In a statement, Adamah Kah, vice president of distressed assets management of Freddie Mac (OTCBB:FMCC) said, “Securitizing loans that have been modified and are now performing will allow Freddie Mac to better manage its mortgage-related investments portfolio. We are taking another important step that creates liquidity and taxpayer value.”

According to the company, the modified mortgages were put into a new Freddie Mac Fixed-Rate Modified Participation Certificates (Modified PCs) with new “MA-MD” prefixes. The company classified said the Modified PCs are TBA deliverable, do not include loans modified through the Home Affordable Mortgage Program (HAMP), and are eligible collateral for new Freddie Mac Giant PC securities.

Neil Hughes, vice president and interim head of Single Family Securitization of Freddie Mac (OTCBB:FMCC) said, “As we continually seek to provide more transparency to the investment community, we are providing additional information on these securities which should aid in their valuation.”

Last month, a number of hedge fund managers including John Paulson are pushing for the privatization of Fannie Mae (OTCBB:FNMA) and Freddie Mac (OTCBB:FMCC).