Freddie Mac Sells $586 Million in NPLs

Rhea-AI Summary

Freddie Mac sold 3,564 non-performing residential first lien loans worth $586 million. The sale is part of Freddie Mac's Standard Pool Offerings (SPO®). The loans consist of mortgage loans secured by geographically diverse properties. The winning bidders for the SPO pools are VRMTG ACQ, LLC. The sale is expected to settle in November 2023.

Awards 2 SPO Pools to One Winner

MCLEAN, Va., Sept. 26, 2023 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced it sold via auction 3,564 non-performing residential first lien loans (NPLs) from its mortgage-related investments portfolio. The loans, with a balance of approximately $586 million, are currently serviced by Specialized Loan Servicing LLC, Select Portfolio Servicing, Inc., NewRez LLC, d/b/a Shellpoint Mortgage Servicing and Nationstar Mortgage LLC d/b/a RightPath Servicing. The transaction is expected to settle in November 2023. The sale is part of Freddie Mac’s Standard Pool Offerings (SPO^®). Freddie Mac, through its advisors, began marketing the transaction on August 28, 2023 to potential bidders, including non-profits and Minority, Women, Disabled, LGBT, Veteran or Service-Disabled Veteran-Owned Businesses (MWDOBs), neighborhood advocacy organizations and private investors active in the NPL market. Bids for the upcoming Extended Timeline Pool Offering (EXPO), which is a smaller sized pool of loans, are due from qualified bidders by October 19, 2023.

For the SPO^® offerings, the loans were offered as two separate pools of mortgage loans. The two pools consist of mortgage loans secured by geographically diverse properties. Investors had the flexibility to bid on each pool individually and/or any combination of pools.

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 53 percent of the aggregate pool balance. Additionally, 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 SPO pools and winning bidders are summarized below:

Description	Pool #1	Pool #2
Unpaid Principal Balance	$234.3 million	$351.3 million
Loan Count	1434	2130
BPO-weighted* CLTV (in %)	44	43
Average Months Delinquent	37	42
Average Loan Balance (in $000s)	163.4	164.9
Geographical Distribution	National	National
Winning Bidder	VRMTG ACQ, LLC	VRMTG ACQ, LLC
Cover Bid Price (% of UPB) (second-highest bid price)	Mid-High 90s	High 90s

*Broker Price Opinions (BPOs)

Advisors to Freddie Mac on the transaction are Wells Fargo Securities, LLC and First Financial Network, Inc., a woman-owned business.

Freddie Mac’s seasoned loan offerings focus 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. Since 2011, Freddie Mac has sold $9.7 billion of NPLs and securitized approximately $77.4 billion of RPLs consisting of $30.4 billion via fully guaranteed MBS, $34.9 billion via the Seasoned Credit Risk Transfer (SCRT) program, and $12.1 billion via the Seasoned Loans Structured Transaction (SLST) program. 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’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More: Website | Consumers | Twitter | LinkedIn | Facebook | Instagram | YouTube

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