Investments Lending Servicing

Goldman Sachs subsidiary continues snapping up non-performing loans from GSEs

MTGLQ Investors buys fourth pool of NPLs in 2016

Past due foreclosure home

For the fourth time in 2016, and the second time in a week, MTGLQ Investors, L.P., a "significant subsidiary" of Goldman Sachs, is the winning bidder for a pool of non-performing loans from one of the government-sponsored enterprises, increasing its total amount of loans bought from Fannie Mae and Freddie Mac further beyond $2 billion.

According to the Securities and Exchange Commission, Goldman Sachs owns, directly or indirectly, at least 99% of the voting securities of MTGLQ Investors, L.P.

Last week, Fannie Mae announced that MTGLQ Investors bought another pool of non-performing loans, its third from a GSE in 2016. That pool of NPLs included 1,760 loans with an aggregate unpaid principal balance of $329,788,631.

MTGLQ Investors bought its first pool of NPLs from Fannie Mae in February, buying two pools of NPLs representing 2,068 loans that carried an unpaid principal balance of $418,414,683.

And earlier in May, MTGLQ Investors was the winning bidder of all four pools of an even larger sale, buying up 7,900 non-performing loans, which totaled $1.48 billion in unpaid principal balance.

Each of those previous NPL purchases was from Fannie Mae, but now, MTGLQ Investors is branching out to Freddie Mac as well.

According to an announcement from Freddie Mac, MTGLQ Investors was the winning bidder for 487 “deeply delinquent” non-performing loans that are currently serviced by JPMorgan Chase Bank.

The loans carry a total unpaid principal balance of $130.2 million, pushing MTGLQ Investors’ total NPL haul above $2.3 billion.

According to Freddie Mac, the loans in this latest pool have been delinquent for approximately three and half years, on average, and carry an average loan balance of $267,400.

“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 the announcement.

Additionally, Freddie Mac noted that approximately 27% of the underlying mortgages were previously modified and subsequently became delinquent.

Freddie Mac also stated that the underlying pool is “geographically diverse,” and carries a loan-to-value ratio of approximately 91%, based on broker price opinion.

Advisors to Freddie Mac on the transaction were J.P. Morgan Securities, Credit Suisse Securities and First Financial Network.

According to Freddie Mac, the transaction is expected to settle in August 2016 and servicing will be transferred once the deal is settled.

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