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Freddie Mac selling off $632 million in non-performing loans

Multiple pools of deeply delinquent loans to be auctioned

As part of its ongoing effort to offload non-performing loans, Freddie Mac announced the auction of four pools of deeply delinquent loans, totaling $632.2 million.

The offering is being made available in three Standard Pool Offerings, totaling $608.2 million, and one Extended Timeline Pool Offering of $23.9 million.

While Freddie has made several Standard Pool Offerings available before, including its largest ever sale of seriously delinquent loans in March, this offering will feature just the second Extended Timeline Pool Offering.

Freddie announced the new program, also called EXPO, in April and announced its first NPL sale under the EXPO umbrella at the same time.

Last month, Freddie announced the completion of its first EXPO sale, selling via auction 157 deeply delinquent non-performing loans from its mortgage investment portfolio.

According to Freddie, the EXPO pools carry a timeline between transaction’s announcement and the date bids are due that is extended approximately two weeks from the typical marketing period for the larger NPL pools.

This is intended to provide smaller potential investors extra time to secure funds to participate in the auctions.

The new EXPO offering features non-performing loans that are 100% concentrated in Cook County, Illinois. CitiMortgage is currently servicing the loans, Freddie Mac said.

All eligible bidders, including private investors, minority and women-owned businesses, nonprofits and neighborhood advocacy funds are encouraged to bid, Freddie said.

Freddie also said that the winning bidder will be determined on the basis of economics, subject to meeting Freddie Mac's internal reserve levels.

To participate, all potential bidders require approval from Freddie Mac to access the secure data room containing information about the NPLs and to bid on the NPL pool.

Advisors to Freddie Mac on the transaction are Citigroup Global Markets Inc., Credit Suisse Securities and The Williams Capital Group, L.P.

According to Freddie, bids are due from qualified bidders on July 28 on the SPO pools and Aug. 18 on the EXPO pool.

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