Freddie Mac completes first small pool sale of deeply delinquent mortgages

EXPO program targets smaller investors

Freddie Mac announced that it completed its first sale of a small pool of deeply delinquent non-performing loans as part of a new program designed to attract smaller investors. The smaller pools are available in addition to the larger pools of NPLs that Freddie recently began selling.

Freddie announced the new program, called Extended Timeline Pool Offering, or EXPO, in April and announced its first NPL sale under the EXPO umbrella at the same time.

Now, Freddie has completed its first EXPO sale, selling via auction 157 deeply delinquent non-performing loans from its mortgage investment portfolio. According to Freddie, all of the properties backing these loans are located in Miami-Dade County, Florida. The loans have an aggregate unpaid principal balance of $31 million.

The loans were offered as a single pool and Corona Asset Management XII was the winning bidder. According to Freddie, the cover bid price (the second highest bid) was in the high 80's percent of UPB. The pool’s weighted average broker price opinion loan-to-value ratio is 80%, the average loan size is $199,079 and the note rate is 5.60%.

According to Freddie Mac, the loans in the pool 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 said.

Mortgages that were previously modified and subsequently became delinquent make up approximately 22% of the aggregate pool balance.

Freddie’s latest sale of NPLs meet the directive set by the Federal Housing Finance Agency, which outlined the new requirements for sales of NPLs by Freddie Mac and Fannie Mae to ensure the loans are transferred to capable mortgage servicers.

The deal is expected to settle in late July. 

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