SOURCE: Freddie Mac

Freddie Mac

June 21, 2016 13:56 ET

Freddie Mac Sells $706 Million of Seriously Delinquent Loans

MCLEAN, VA--(Marketwired - Jun 21, 2016) - Freddie Mac (OTCQB: FMCC) today announced it sold via auction 2,879 deeply delinquent non-performing loans (NPLs) serviced by Bayview Loan Servicing, LLC from its mortgage-related investments portfolio. The transaction is expected to settle in August 2016, and servicing will be transferred post-settlement. The sale is part of Freddie Mac's Standard Pool Offerings (SPO®). Freddie Mac, through its advisors, began marketing the transaction on May 25, 2016, to potential bidders, including minority and women-owned businesses (MWOBs), non-profits, neighborhood advocacy funds and private investors active in the NPL market.

The loans were offered as five separate pools of mortgage loans, three of them geographically diverse SPO pool offerings. The two remaining pools were New York- and New Jersey-only pools, respectively. Investors had the flexibility to bid on one or multiple pools, or bid on the aggregate of the SPO pools. All five pools were sold at a weighted average price in the mid-60s as a percent of the total unpaid principal balance. 

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. Mortgages that were previously modified and subsequently became delinquent comprise approximately 29 percent of the aggregate pool balance. The aggregate pool is geographically diverse and has a loan-to-value ratio of approximately 92 percent, based on BPO (Broker Price Opinion).

The pools and winning bidders are summarized below:

                     
Description   Pool #1   Pool #2   Pool #3   Pool #4   Pool #5
Unpaid Principal Balance   $138.1 million   $189.7 million   $165.4 million   $90.0 million   $123.1 million
Loan Count   555   629   798   364   533
CLTV Range   All   All   Less than 90   Greater than or equal to 90 and less than 110   Greater than or equal 110
BPO CLTV   109   87   69   99   137
Average Months Delinquent   67   65   50   53   49
Average Loan Balance ($000)   248.8   301.6   207.3   247.4   230.9
Geographical Distribution   NJ   NY   National   National   National
Winning Bidder   LSF9 Mortgage Holdings, LLC   Upland Mortgage Acquisition Company II, LLC   LSF9 Mortgage Holdings, LLC   LSF9 Mortgage Holdings, LLC   LSF9 Mortgage Holdings, LLC
                     

Advisors to Freddie Mac on the transaction were Bank of America Merrill Lynch and The Williams Capital Group, L.P., a minority-owned business.

Through the first quarter of 2016, Freddie Mac sold $4.3 billion in NPLs as part of its strategy to reduce the less liquid assets in its mortgage-related investments portfolio. Requirements guiding the servicing of these transactions are focused on improving borrower outcomes and stabilizing communities. In April 2016, Freddie Mac's regulator, the Federal Housing Finance Agency, announced enhanced requirements for NPL sales. Additional information about the company's NPL sales is at http://www.freddiemac.com/npl/.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog at FreddieMac.com/blog.