Freddie Mac Announces $185 Million Loan Sale

Rhea-AI Summary

Freddie Mac (FMCC) announced the sale of 1,139 delinquent residential first lien mortgage loans via auction, totaling approximately $185 million. These loans, which have been delinquent for an average of 105 months, will be settled in September 2021. The borrower assistance and loss mitigation agreements must be honored by the bidder, MCLP Asset Company, Inc. This sale is part of Freddie Mac's strategy to reduce less-liquid assets, having previously sold $9 billion of non-performing loans and securitized $74 billion of re-performing loans to enhance economic stability.

Positive

• Sale of $185 million in delinquent mortgage loans enhances liquidity.
• Continues strategy to reduce less-liquid assets in the mortgage portfolio.
• MCLP Asset Company, Inc. committed to borrower assistance and loss mitigation.

Negative

• Loans have been delinquent for an average of 105 months, indicating long-term asset issues.
• 87% of the loans in the pool were previously modified and subsequently became delinquent.

MCLEAN, Va., Aug. 06, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced it sold via auction 1,139 delinquent residential first lien mortgage loans from its mortgage-related investments portfolio. On average, it has been 105 months since the loans in the pool first became 4 months delinquent. The loans, with a balance of approximately $185 million, are currently serviced either by Select Portfolio Servicing, Inc. or Community Loan Servicing, LLC f/k/a Bayview Loan Servicing, LLC. The transaction is expected to settle in September 2021. Freddie Mac, through its advisor, began marketing the transaction on July 16, 2021 to potential bidders, including non-profits and Minority, Women, Disabled, LGBT, Veteran or Service-Disabled Veteran-Owned Businesses (MWDOBs) and private investors, active in the market.

Mortgages that were previously modified and subsequently became delinquent comprise approximately 87 percent of the aggregate pool balance. The Purchaser is required to (i) honor the terms of existing loss mitigation agreements, solicit distressed borrowers for assistance except in limited cases and ensure all pending loss mitigation actions are completed; and (ii) abide by any future foreclosure and eviction moratoria announced by the Federal Housing Finance Agency or other federal moratoria applicable to Freddie Mac single-family loans.

The pool and winning bidder are summarized below:

Description	Pool
Unpaid Principal Balance	$185 million
Loan Count	1,139
CLTV Range (in %)	All
BPO-weighted* CLTV (in %)	50
Average Months Delinquent	5
Average Loan Balance (in $000s)	162
Geographical Distribution	National
Winning Bidder	MCLP Asset Company, Inc
Cover Bid Price (% of UPB) (second-highest bid price)	100 area

*Broker Price Opinions (BPOs)

Wells Fargo Securities, LLC is the advisor to Freddie Mac on the transaction.

Freddie Mac’s seasoned loan offerings are focused on reducing less-liquid assets in the company’s mortgage-related investments portfolio in an economically sensible way. This includes sales of non-performing loans (NPLs), securitizations of re-performing loans (RPLs) and structured RPL transactions.

To date, Freddie Mac has sold $9 billion of NPLs and securitized approximately $74 billion of RPLs consisting of $30 billion via fully guaranteed PCs, $32 billion via Seasoned Credit Risk Transfer (SCRT) senior/sub securitizations, and almost $12 billion via Seasoned Loans Structured Transaction (SLST) offerings. Requirements guiding the servicing of these transactions are focused on improving borrower outcomes and stabilizing communities. Additional information about Freddie Mac’s seasoned loan offerings is available at http://www.freddiemac.com/seasonedloanofferings/

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac, and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT: Fred Solomon
703-903-3861
Frederick_Solomon@freddiemac.com

FAQ

What did Freddie Mac announce on August 6, 2021?

Freddie Mac announced it sold 1,139 delinquent mortgage loans via auction, totaling approximately $185 million.

What is the average delinquency period of the loans sold by Freddie Mac?

The average delinquency period of the loans sold is 105 months.

Who is the winning bidder for Freddie Mac's mortgage loan auction?

The winning bidder for the auction is MCLP Asset Company, Inc.

How much has Freddie Mac sold in non-performing loans to date?

Freddie Mac has sold $9 billion in non-performing loans to date.

What is the purpose of Freddie Mac's seasoned loan offerings?

Freddie Mac's seasoned loan offerings aim to reduce less-liquid assets and stabilize communities.