Investments Lending

Freddie Mac sells off $1.1 billion in non-performing loans

Finds familiar buyer for pools of Wells Fargo-serviced loans

Delinquent house

Freddie Mac announced Tuesday that it sold off 5,311 seriously delinquent loans from its investment portfolio. The loans carry an unpaid principal balance of approximately $1.1 billion.

The sale, which was initially announced last month, was completed via auction, with five pools of loans being sold to several different buyers, including one that has become familiar in sales like these.

According to Freddie Mac, Pretium Mortgage Credit Partners I Loan Acquisition, LP was the winning bidder on three of the pools, with its total acquisition equaling $657.8 million of the portfolio.

Pretium Mortgage Credit Partners has been the winning bidder in several other recent non-performing loan auctions held by Freddie Mac recently.

In October, Pretium was the winning bidder for one pool in a similar NPL sale. That pool carried a total unpaid principal balance of $209.4 million on 1,180 loans.

And in September, Pretium was the winning bidder for another NPL pool, which carried an unpaid principal balance of $158.1 million on 700 loans.

In this latest sale, the entire portfolio of loans are currently being serviced by Wells Fargo (WFC) and Freddie Mac said that servicing will be transferred once the deal closes, which is expected to happen in February.

According to Freddie Mac, this latest pool of loans has been delinquent for approximately three years, on average.

Given the deep delinquency status of the loans, the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure, Freddie Mac said.

In its report, Freddie Mac said approximately 32% of the aggregate pool balance are mortgages that were previously modified and subsequently became delinquent.

The total pool is “geographically diverse” and has a loan-to-value ratio of approximately 9%, based on broker price opinion, Freddie Mac said.

Pretium was the winning bidder for three pools, Pool #1, Pool #2 and Pool #5.

According to Freddie Mac, Pool #1 carries an unpaid balance of $330.5 million on 1,777 loans. The collateralized loan-to-value ratio is less than or equal of 90%. The broker price opinion collateralized LTV ratio is 72%.

The loans in Pool #1 are 32 months delinquent on average and have an average loan balance of $186,000.

Pool #2 carries an unpaid balance of $211.3 million on 954 loans. The collateralized loan-to-value ratio is greater than 90% and less than or equal to 110%. The broker price opinion collateralized LTV ratio is 99%.

The loans in Pool #2 are 33 months delinquent on average and have an average loan balance of $221,500.

Pretium also was the winning bidder for Pool #5. Pool #5 carries an unpaid balance of $116 million on 645 loans. The broker price opinion collateralized LTV ratio is 105%.

The loans in Pool #5 are 29 months delinquent on average and have an average loan balance of $179,900.

The winning bidder for Pool #3 was Rushmore Loan Management Services.

Pool #3 carries an unpaid balance of $184.1 million on 942 loans. The collateralized loan-to-value ratio is greater than 110%. And the broker price opinion collateralized LTV ratio is 134%.

The loans in Pool #3 are 32 months delinquent on average and have an average loan balance of $195,500.

The winning bidder for Pool #4 was 21st Mortgage Corporation.

Pool #4 carries an unpaid balance of $214.2 million on 993 loans. The broker price opinion collateralized LTV ratio is 91%.

The loans in Pool #4 are 32 months delinquent on average and have an average loan balance of $215,700.

The sale is Freddie Mac’s eighth sale of non-performing loans since the Federal Housing Finance Agency announced the new requirements for sales of NPLs by Freddie Mac and Fannie Mae to make sure the loans go to capable mortgage servicers.

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