Freddie Mac Update: An Overview of Non-Performing Loans


Achieving its portfolio of mortgage-related investments, it announced the auctioning of 2,806 non-performing senior residential loans (NPLs), according to Freddie mac.

Specialized Loan Servicing LLC currently manages the loans, with a balance of $ 464 million. The expected settlement date of the transaction is December. Through his advisers, Freddie Mac began marketing the deal to potential bidders, including nonprofits and minorities, women, people with disabilities and LGBT people, on September 8. Extended maturity pool offer, consisting of a reduced pool of loans.

The loans were offered as four distinct groups of mortgages for SPO offers.

Among the winners in the SPO pools and winning bids were the number of outstanding principal balance loans and the average number of months past due.

Wells Fargo Securities, LLC and First Financial Network, Inc., a woman-owned company, served as transaction advisers.

Freddie Mac’s sold $ 8.4 billion of NPL and securitized over $ 66.5 billion of RPL. They consist of $ 29.0 billion through fully secured PCs, $ 28.3 billion through senior securitizations / Seasonal Credit Risk Transfer (SCRT) subtitles, and $ 9.3 billion through seasonal loan structured transaction offers (SLST).

In June, the Federal Housing Finance Agency (FHFA) released a report on the sale of non-performing loans (NPLs) by Fannie Mae and Freddie Mac. The Non-Performing Loan Sales (GSE) report includes information on NPLs sold through December 31, 2019 and reflects borrowers’ performance on NPLs sold through June 30, 2019 and reported through December 31. 2019, DSNews reported at the time.

The sale of NPLs reduces the number of delinquent loans in GSE’s portfolios and transfers credit risk to the private sector. The FHFA and the companies impose requirements on NPL buyers designed to achieve more favorable outcomes for borrowers than foreclosure.

This report showed that, up to December 31, 2019, the companies had sold 126,757 NPL with a total outstanding capital balance (UPB) of $ 23.8 billion.

NPLs sold had an average delay of 2.9 years and an average loan-to-value ratio of 91%. The average delinquency for the swimming pools sold ranged from 1.4 to 6.2 years.

NPLs in New Jersey, New York and Florida accounted for almost half (44%) of NPLs sold. These three states accounted for 47% of Business loans that were one year or more past due as of December 31, 2014, before NPL sales began in 2015.

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