Ditech Financial is tapping the securitization market to fund advances of principal and interest payments to mortgage bondholders.

The sponsor plans to issue $300 million in bonds backed by repayment rights to advances on Freddie Mac and Fannie Mae mortgages via Green Tree Agency Advance Funding Trust (Series 2015-T1, 2015-T2 and 2014-VF2).

This is the third servicer advance RMBS deal so far this year, following two deals that Ocwen completed earlier this year; it's also the second deal to be backed by repayments rights to advances on agency mortgages.

Although servicing mortgages guaranteed by Fannie and Freddie is not as capital intensive as servicing nonagency mortgage securitizations, more participants with agency servicing portfolios are still expected to look to the ABS market for funding.

In October of last year, Standard & Poor's revised criteria for rating servicing advance receivables securitization and tailored it for agency RMBS because of the growing appetite for the asset class.

Ocwen was previously in the market in June with a $450 million agency deal, which refinanced a facility that it used to fund advances on mortgages insured by Freddie Mac. Nationstar is the only other issuer to place agency notes under its Nationstar Agency Advance Funding Trust in January 2013.

Ditech's Series 2015-T1 trust is offering $147.5 million of AAA rated term notes, $26.9 million of AA rated term notes, $5.8 million of A rated term notes and $19.8 million of BBB rated term notes. The notes are structured with a legal final maturity of October 2046 and a one-year weighted average life.

Similarly the T2 series will offer $67.9 million of AAA rated term notes, $13.1 million of AA rated term notes, $4.2 million of A rated term notes and $14.8 million of BBB rated term notes. The notes are structured with a legal final maturity of October 2048 and weighted average life of two years.

In conjunction with the term notes, the sponsor plans to offer variable funding notes that will offer tranches rated from AAA to BBB. The notes are structured with a legal final maturity of October 2046.

The deal is expected to close Oct. 21, 2015.

On Aug. 31, Ditech, a unit of Walter Investment Management, was combined with Green Tree Servicing.

Ditech was acquired by Walter Investment Management from Ally Financial, formerly GMAC-ResCap, in March 2013. Following the acquisition, Ditech operated under the name Green Tree Servicing for regulatory and licensing reasons. DT Holdings, Ditech's parent company, is a subsidiary of Walter Investment Management. In March 2014, the company resumed originating loans using the Ditech name.

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