Freddie Mac Sells $104 Million in Non-Performing Loans

By klrw460 April 9, 2024

Freddie Mac Awards Single Loan Pool in Latest Auction

MCLEAN, Va., April 09, 2024 – Freddie Mac (OTCQB: FMCC) has successfully auctioned off 679 significantly overdue non-performing residential first lien loans from its mortgage investments portfolio. These loans, which total around $104 million in balance, are managed by Specialized Loan Servicing LLC and NewRez LLC, operating as Shellpoint Mortgage Servicing. The sale, set to conclude in June 2024, is part of Freddie Mac’s Standard Pool Offerings (SPO®).

The auction started marketing to prospective buyers on March 6, 2024, targeting a diverse group including non-profits, minority, women, disabled, LGBTQ+, veteran, and service-disabled veteran-owned businesses (MWDOBs), neighborhood advocacy groups, and private investors specialized in the non-performing loan (NPL) sector. The smaller Extended Timeline Pool Offering (EXPO), also open for bids, will close on April 25, 2024.

The SPO® was comprised of a single pool of mortgage loans backed by properties spread across various locations. These loans, mainly in delinquency or foreclosure, represent homes where borrowers were likely considered for earlier loss mitigation. Notably, loans that had been modified but later defaulted again make up about 47% of the pool’s total value. Buyers are obliged to adhere to existing mitigation agreements and engage with distressed borrowers to explore further assistance options, barring a few exceptions.

Key details of the winning bid for the SPO pool are as follows:

  • Unpaid Principal Balance: $103.7 million
  • Number of Loans: 679
  • Geographical Spread: Nationwide
  • Winning Bidder: RCAF Loan Acquisition, LP (managed by Pretium Residential Credit Management, LLC)
  • Broker Price Opinion-weighted Combined Loan to Value (CLTV) Ratio: 42%
  • Unpaid Principal Balance-weighted CLTV Ratio: 52%
  • Average Delinquency: 29 months
  • Average Loan Size: Approximately $152,800
  • Second Highest Bid: Approximately 100% of Unpaid Principal Balance

This sale is part of Freddie Mac’s ongoing efforts to reduce its portfolio of non-performing loans and help stabilize the housing market.

For more information, read the original press release from: