As its fellow government-sponsored enterprise did earlier in the week, Freddie Mac announced Friday that it is selling hundreds of millions of dollars in non-performing loans to a familiar series of private investors.
First, it was Fannie Mae’s turn to sell off 9,400 non-performing loans that carry an unpaid principal balance of $1.68 billion.
Then, Freddie Mac announced that it is selling 3,621 non-performing loans that carry an unpaid principal balance of $667 million.
In the sale, which Freddie Mac first announced last month, three private investors bought up the non-performing loans.
All three of the winning bidders, Pretium Mortgage Credit Partners I Loan Acquisition, Upland Mortgage Acquisition Company II, and Rushmore Loan Management Services, are repeat buyers of NPLs from Fannie Mae and Freddie Mac.
Last year, for example, those three investors bought $1 billion in NPLs from Freddie Mac in one sale.
According to Freddie Mac, this latest NPL pool was split into four smaller “geographically diverse” pools. Investors had the “flexibility” to bid on each pool individually or a combination of pools, Freddie Mac said.
Freddie Mac said that the loans in this sale are “deeply delinquent,” having been delinquent for more than two years, on average.
Freddie Mac also said that given the deep delinquency 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.”
The pool of NPLs also includes mortgages that were previously modified and subsequently became delinquent. Loans that were modified and became delinquent make up approximately 50% of the aggregate pool balance, Freddie Mac said.
Additionally, the aggregate pool has a loan-to-value ratio of approximately 89%, based on Broker Price Opinion.
Per details from Freddie Mac, Pretium Mortgage Credit Partners I Loan Acquisition was the winning bidder on two of the pools, totaling $314.4 million in unpaid principal balance.
Pool #1 consists of 1,171 loans with an unpaid principal balance of $203 million. The collateralized LTV range of the loans is less than 90%. The BPO CLTV on the loans is 71%.
The loans in Pool #1 have an average loan balance of $173,300 and are an average of 31 months delinquent.
Pool #2 consists of 700 loans with an unpaid principal balance of $111.4 million. The collateralized LTV range of the loans is less than 90%. The BPO CLTV on the loans is 69%.
The loans in Pool #2 have an average loan balance of $159,100 and are an average of 20 months delinquent.
Upland Mortgage Acquisition Company II was the wining bidder for Pool #3, which consists of 830 loans with an unpaid principal balance of $171.2 million. The collateralized LTV range of the loans is greater than or equal to 90% and less than 110%. The BPO CLTV on the loans is 99%.
The loans in Pool #3 have an average loan balance of $206,300 and are an average of 26 months delinquent.
Rushmore Loan Management Services was the wining bidder for Pool #4, which consists of 920 loans with an unpaid principal balance of $181.4 million. The collateralized LTV range of the loans is greater than or equal to 110%. The BPO CLTV on the loans is 136%.
The loans in Pool #4 have an average loan balance of $197,200 and are an average of 26 months delinquent.
According to Freddie Mac, the transaction is expected to settle in May 2017, and servicing will be transferred post-settlement.
