Freddie Mac Sells $16.6 Million of NPLs in Extended Timeline Pool

Rhea-AI Summary

Freddie Mac (FMCC) announced the auction sale of 68 non-performing residential first lien loans (NPLs) to Restora, LLC, which is part of the Extended Timeline Pool Offering (EXPO^®). The transaction, expected to settle in January 2022, includes a total unpaid principal balance of $16.5 million, divided into two pools. The loans are primarily delinquent, with 94% of the pool balance consisting of previously modified loans. Freddie Mac aims to reduce less-liquid assets in its portfolio through this sale, having already sold over $8 billion in NPLs.

Positive

• Freddie Mac sold 68 NPLs worth $16.5 million, indicating active portfolio management.
• The sale is part of Freddie Mac's strategy to reduce less-liquid assets in its mortgage-related investments.

Negative

• 94% of the loan pool balance consists of previously modified loans that are now delinquent.
• The average delinquency period is over 29 months for the second pool, indicating potential challenges in borrower recovery.

MCLEAN, Va., Nov. 22, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced it sold via auction 68 non-performing residential first lien loans (NPLs) serviced by Select Portfolio Servicing, Inc. to Restora, LLC. Restora LLC is majority owned by Restorative Neighborhood Resources LLC (“RNR”). Skid Row Housing Trust, a not-for-profit entity, is the sole member of RNR. It provides permanent supportive housing so that people who have experienced homelessness, prolonged extreme poverty, poor health, disabilities, mental illness and/or addiction can lead safe, stable lives in wellness. The sale is part of Freddie Mac’s Extended Timeline Pool Offering (EXPO^®) and the transaction is expected to settle in January 2022. Freddie Mac, through its advisors, began marketing the transaction on September 16, 2021 to potential bidders, including non-profit organizations and Minority, Women, Disabled, LGBT, Veteran or Service-Disabled Veteran-Owned Businesses (MWDOBs), neighborhood advocacy organizations and private investors active in the NPL market.

Given the delinquency status of the loans, the borrowers have likely been evaluated previously for loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 94.0 percent of the pool balance. Also, purchasers are required to honor the terms of existing loss mitigation agreements and solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed.

The pools and winning bidder are summarized below:

Description	EXPO Pool #1		EXPO Pool #2
Unpaid Principal Balance	$5.2 million		$11.3 million
Loan Count	25		43
BPO-weighted* CLTV (in %)	81		93
Average Months Delinquent	31		29
Average Loan Balance (in $000s)	$208.7		$263.7
Geographical Distribution	Florida		New Jersey
Winning Bidder	Restora, LLC		Restora, LLC
Cover Bid Price (% of UPB) (second-highest bid price)	Low 90s		Mid 70s

*Broker Price Opinions (BPOs)

Advisors to Freddie Mac on the transaction are Citigroup Global Markets Inc. and First Financial Network, Inc., a woman-owned business.

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 NPLs, securitizations of re-performing loans (RPLs) and structured RPL transactions.

To date, Freddie Mac has sold over $8 billion of NPLs and securitized approximately $75 billion of RPLs consisting of (i) $30 billion via fully guaranteed PCs, (ii) $33 billion via Seasoned Credit Risk Transfer (SCRT) senior/sub securitizations, and (iii) over $11 billion in Seasoned Loan Structured Transaction (SLST) offerings. Requirements guiding the servicing of these transactions are focused on improving borrower outcomes and stabilizing communities. Additional information about the company's seasoned loan offerings can be found 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 is the significance of Freddie Mac's recent auction sale involving FMCC?

Freddie Mac's auction sale of NPLs to Restora, LLC, is part of its strategy to manage less-liquid assets, signifying proactive asset management.

How much was the unpaid principal balance in the NPL sale by FMCC?

The unpaid principal balance in the NPL sale by Freddie Mac amounted to $16.5 million.

When is the expected settlement date for the Freddie Mac NPL sale?

The expected settlement date for the Freddie Mac NPL sale is January 2022.

What percentage of the loan pool consists of previously modified loans that are now delinquent for FMCC?

Approximately 94% of the loan pool consists of previously modified loans that are now delinquent.

Who was the winning bidder for the NPL auction held by Freddie Mac?

The winning bidder for the NPL auction held by Freddie Mac was Restora, LLC.