Freddie Mac Completes $104 Million Sale of Non-Performing Loans

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Freddie Mac recently concluded the auction of 679 deeply delinquent non-performing residential first-lien loans (NPLs) from its mortgage-related investments portfolio. The loans, amounting to approximately $104 million, are presently serviced by Specialized Loan Servicing LLC and NewRez Shellpoint Mortgage Servicing. The transaction is slated to finalize in June 2024.

Part of Freddie Mac’s Standard Pool Offerings, this sale was marketed to potential bidders, including non-profits, Minority, Women, Disabled, LGBTQ+, Veteran, or Service-Disabled Veteran-Owned Businesses (MWDOBs), neighborhood advocacy organizations, and private investors active in the NPL market. The marketing commenced on March 6, 2024, through Freddie Mac’s advisors. Qualified bidders for the Extended Timeline Pool Offering (EXPO), a smaller-sized pool of loans, are required to submit their bids by April 25, 2024.

The loans in the Standard Pool Offering were presented as one pool, secured by geographically diverse properties. Given the delinquency status, borrowers have likely undergone previous evaluations for loss mitigation, such as modification or foreclosure alternatives. Approximately 47 percent of the aggregate pool balance comprises mortgages previously modified and subsequently delinquent.

Purchasers are obligated to adhere to existing loss mitigation agreements, extend assistance to distressed borrowers, and complete pending loss mitigation actions, except in limited cases. This sale represents Freddie Mac’s ongoing efforts to manage its mortgage-related investments portfolio efficiently.