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Freddie Mac sells off another $1.4 billion in non-performing loans

Familiar buyer snaps up more than half of available loans

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Freddie Mac announced Wednesday that it selected the winning bidders in its latest massive sale of non-performing loans, with one now-familiar buyer snapping up more than half of the $1.4 billion pool of NPLs.

According to Freddie Mac, the $1.4 billion offering of 6,816 deeply delinquent non-performing loans was split into seven different pools.

Nationstar Mortgage is currently servicing all of the loans that were included in this sale.

The loans in in this sale have been delinquent for almost four 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.

Mortgages that were previously modified and subsequently became delinquent comprise approximately 34% of the aggregate pool balance.

Lone Star Funds, or more specifically the private-equity's trust, LSF9 Mortgage Holdings, was the wining bidder for three of those pools, which carry a cumulative unpaid principal balance of $822.6 million.

The purchase is the latest in string of NPL purchases by LSF9 Mortgage Holdings.

In September of last year, LSF9 Mortgage Holdings also purchased three pools on NPLs from Freddie Mac that carried the exact same unpaid principal balance –$822.6 million.

That was LSF9 Mortgage Holdings’ third large purchase of NPLs from one of the government-sponsored enterprises in 2015.

In May 2015, Freddie Mac sold 1,052 deeply delinquent Ocwen-serviced non-performing loans with an aggregate unpaid principal balance of $201 million to LSF9 Mortgage Holdings.

In August 2015, the trust also purchased two pools of non-performing loans from Fannie Mae, which included approximately 3,900 loans totaling $765 million in unpaid principal balance.

In this latest purchase from Freddie Mac, LSF9 Mortgage Holdings was the winning bidder for Pools #1, #2, and #3 of the sale.

Pool #1 carries an unpaid principal balance of $132.8 million on 689 loans, with the loans carrying an average loan balance of $192,800. The loans in Pool #1 are an average of 44 months delinquent, carry a collateralized loan-to-value ratio of less than 90%, and brokers price opinion CLTV of 73%.

Pools #2 and #3 are much larger.

Pool #2 carries an unpaid principal balance of $335.7 million on 1,720 loans, with the loans carrying an average loan balance of $195,200. The loans in Pool #2 are an average of 45 months delinquent, carry a CLTV ratio of less than 90%, and brokers price opinion CLTV of 73%.

Pool #3 carries an unpaid principal balance of $354.1 million on 1,537 loans, with the loans carrying an average loan balance of $230,400. The loans in Pool #3 are an average of 47 months delinquent, carry a CLTV ratio of greater than or equal to 90% and less than 110%, and brokers price opinion CLTV of 100%.

The winning bidder for Pools #4 and #5 was Rushmore Loan Management Services.

According to Freddie Mac, Pool #4 carries an unpaid principal balance of $373.9 million on 1,745 loans, with the loans carrying an average loan balance of $214,300. The loans in Pool #4 are an average of 47 months delinquent, carry a CLTV of greater than or equal to 110%, and brokers price opinion CLTV of 138%.

Pool #5 carries an unpaid principal balance of $165 million on 829 loans, with the loans carrying an average loan balance of $199,000. The loans in Pool #5 are an average of 41 months delinquent, carry a varied CLTV, and brokers price opinion CLTV of 130%.

Additionally, as part of this sale, Freddie Mac also sold two smaller pools of loans to a non-profit, Community Loan Fund of New Jersey.

In this sale, Community Loan Fund of New Jersey was the winning bidder for two Extended Timeline Pool Offerings, which target participation by smaller investors, including non-profits and minority and women-owned businesses, with an extended bidding timeline and limited pool sizes.

The first pool that Community Loan Fund of New Jersey is buying carries an unpaid principal balance of $27 million on 113 loans, with the loans carrying an average loan balance of $239,000. The loans are an average of 57 months delinquent, carry a varied CLTV, and brokers price opinion CLTV of 100%.

The loans in this pool are all located in Miami, Florida.

The second pool that Community Loan Fund of New Jersey is buying carries an unpaid principal balance of $37.6 million on 183 loans, with the loans carrying an average loan balance of $205,500. The loans are an average of 51 months delinquent, carry a varied CLTV, and brokers price opinion CLTV of 98%.

The loans in this pool are all located in Tampa, Florida.

Advisors to Freddie Mac on the transaction were Wells Fargo Securities, Credit Suisse Securities and The Williams Capital Group, a minority-owned business.

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