As part of its ongoing efforts to sell off some of the deeply delinquent mortgages held in its portfolio, Freddie Mac announced recently that it plans to sell nearly $44 million in non-performing loans to a non-profit buyer.
The sale is part of Freddie Mac's Extended Timeline Pool Offerings, which target minority and women-owned businesses, non-profits, and neighborhood advocacy funds for the purchase of non-performing loans.
In this case, the winning bidder is Community Loan Fund of New Jersey, which agreed to purchase two pools of 189 non-performing loans that total $43.7 million in unpaid principal balance.
According to Freddie Mac, the loans have been delinquent for almost five 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.
Additionally, mortgages that have already been modified and subsequently became delinquent make up approximately 33% of the aggregate pool balance.
Both pools are geographically concentrated in Florida.
Pool #1 contains 110 loans that carry an unpaid principal balance of $26.1 million. The loans are an average of 59 months delinquent, and have an average loan balance of $237,100. The loans also have a varied collateralized loan-to-value ratio range. The loans have a broker price opinion CLTV of 93%.
Pool #2 contains 79 loans that carry an unpaid principal balance of $17.6 million. The loans are an average of 55 months delinquent, and have an average loan balance of $222,500. The loans also have a varied CLTV range. The loans have a broker price opinion CLTV of 92%.
Advisors to Freddie Mac on the transaction were Bank of America Merrill Lynch and The Williams Capital Group.
Bayview Loan Servicing currently services the loans in this sale. According to Freddie Mac, the transaction is expected to settle in September 2016, and servicing will be transferred post-settlement.