Freddie Mac sold 5,398 deeply delinquent non-performing loans from its mortgage investment portfolio on March 25th, making it the largest sale ever of seriously delinquent loans from its portfolio.
Although the loans were offered as three separate pools of mortgage loans, GCAT Management Services was the winning bidder on all three pools.
The loans have an aggregate unpaid principal balance of $985 million, and the transaction is expected to settle in early May 2015.
The three pools were:
- Pool #1: 3,577 NPLs with an aggregate UPB of $629.6 million and a BPO LTV of 74%
- Pool #2: 1,331 NPLs with an aggregate UPB of $235.9 million and a BPO LTV of 84%
- Pool #3: 490 NPLs with an aggregate UPB of $120.0 million and a BPO LTV of 74%
These loans have been delinquent for approximately three years, on average. Mortgages that were previously modified and subsequently became delinquent comprise 24.7% of the aggregate pool balance.
Within the release of the new requirements, Freddie disclosed that it had already sold severely delinquent loans through two transactions in the past six months – one in August 2014 covering $596 million of unpaid principal balance, and the other on Feb. 5, 2015 covering $392 million of UPB. The new standards were based on those two pilot sales.