Investments

Freddie Mac sells $22 million in non-performing loans

Sells 87 non-performing loans via auction

Freddie Mac announced the sale of $22 million in non-performing residential first-lien loans via auction.

The 87 loans were serviced by Specialized Loan Servicing, and transferred to VRMTG ACQ, a minority and woman-owned business. It was part of Freddie Mac’s Extended Timeline Pool Offering and is expected to settle in February 2020.

Freddie Mac began marketing the transaction back in early October to potential bidders such as non-profit organizations and minority, women, disabled, LGBT, veteran or service-disabled veteran-owned businesses.

Given the delinquency status of the loans, the borrowers have likely been previously evaluated for or are already in various stages of loss mitigation, including modification or other alternatives to foreclosure, or even foreclosure itself. Mortgages that were previously modified and subsequently became delinquent comprise approximately 69% of the pool balance.

Purchasers are also required to solicit distressed borrowers for assistance except in limited cases to ensure all pending loss mitigation actions are completed.

Here is the info on the pool:

Unpaid principal balance: $22 million
Loan count: 87
CLTV range: less than or equal to 90%
BPO-weighted CLTV: 74%
Average months delinquent: 27
Average loan balance: $253,100
Geographical distribution: New York (excluding New York City)
Winning Bidder: VRMTG ACQ
Cover bid price: Mid $80s Area

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

This brings Freddie Mac’s total to more than $8 billion in NPLs sold to date, and securitized more than $59 billion in re-performing loans.

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