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Freddie Mac begins marketing $400 million non-performing loan sale

Sale being marketed through five pools

Freddie Mac recently began marketing a non-performing loan sale with about $400 million in unpaid principal balance.

The government-sponsored enterprise said its NPL sale is an auction of seasoned non-performing residential first lien whole loans held in Freddie Mac’s mortgage-related investments portfolio. The loans are currently being serviced by Specialized Loan Servicing.

The loans are currently being marketed via five pools: four standard pool offerings and one extended timeline pool offering, which targets participation by smaller investors such as non-profits, minorities, women, disabled, LGBT, veteran or service-disabled veteran-owned businesses.

Bids on the pools are due by October 31, 2019, for the standard pools, and by November 14, 2019, for the EXPO pool. The four SPO pools are expected to settle in January 2020 while the EXPO pool will likely settle in February 2020.

All eligible bidders, including private investors, MWDOBs, non-profits and neighborhood advocacy organizations are encouraged to bid. To participate, all potential bidders are required to be approved by Freddie Mac and must successfully complete a qualification package to access the secure data room containing information about the NPLs and to bid on the NPL pool. Freddie Mac explained that the bids are to be made on an all-or-none basis for any pool separately or for any combination of SPO pools together.

Advisors to Freddie Mac on the transaction are JPMorgan Securities and First Financial Network.

Freddie Mac explained it is offering these non-performing loans in an attempt to reduce its less liquid assets and reduce risk to U.S. taxpayers. To date, Freddie Mac has sold $8.1 billion in NPLs and $56.7 billion in re-performing loans.

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