Winning Bidders Include Non-Profit and For-Profit Entities
MCLEAN, VA--(Marketwired - Mar 23, 2016) - Freddie Mac (OTCQB: FMCC) today announced it sold via auction 6,816 deeply delinquent non-performing loans (NPLs) serviced by Nationstar Mortgage, LLC from its mortgage investment portfolio. The sale consisted of two transactions: an Extended Timeline Pool Offering (EXPO®) on March 10, 2016 and a Standard Pool Offering (SPO®) on February 25, 2016. The transactions are expected to settle in April and May 2016, and servicing will be transferred post-settlement. Community Loan Fund of New Jersey, Inc., a non-profit, was the winning bidder on the two EXPO pools and two for-profit entities were the winning bidders on the SPO pools. Freddie Mac, through its advisors, began marketing the transaction on January 21, 2016, to potential bidders, including minority and women-owned businesses (MWOBs), non-profits, neighborhood advocacy funds and private investors active in the NPL market.
The loans were offered as seven separate pools of mortgage loans. Two of the pools were EXPO pools consisting of Florida mortgage loans and targeting participation by smaller investors, including non-profits and MWOBs, with an extended bidding timeline and limited pool sizes. Five of the pools were geographically diverse SPO pool offerings. Investors had the flexibility to bid on one or multiple pools, or bid on the aggregate of the SPO pools.
The loans have been delinquent for almost four years, on average. Given the deep delinquency status 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. Mortgages that were previously modified and subsequently became delinquent comprise approximately 34 percent of the aggregate pool balance. The aggregate pool is geographically diverse and has a loan-to-value ratio of approximately 97 percent, based on BPO (Broker Price Opinion).
The pools, winning bidders and cover bid prices (second highest bids) are summarized below:
Table 1: EXPO Pool Offerings
| Description | Pool #1 | Pool #2 | ||
| Unpaid Principal Balance | $27.0 million | $37.6 million | ||
| Loan Count | 113 | 183 | ||
| CLTV Range | All | All | ||
| BPO CLTV | 100 | 98 | ||
| Average Months Delinquent | 57 | 51 | ||
| Average Loan Balance ($000) | 239.0 | 205.5 | ||
| Geographical Distribution | Miami, FL | Tampa, FL | ||
| Winning Bidder | Community Loan Fund of New Jersey, Inc. | Community Loan Fund of New Jersey, Inc. | ||
| Cover Bid Price (second-highest bid price) |
Around $70 | Around $70 | ||
Table 2: SPO Pool Offerings
| Description | Pool #1 | Pool #2 | Pool #3 | Pool #4 | Pool #5 | |||||
| Unpaid Principal Balance | $132.8 million | $335.7 million | $354.1 million | $373.9 million | $165.0 million | |||||
| Loan Count | 689 | 1,720 | 1,537 | 1,745 | 829 | |||||
| CLTV Range | Less than 90 | Less than 90 | Greater than or equal to 90 and less than 110 | Greater than or equal 110 | All | |||||
| BPO CLTV | 73 | 73 | 100 | 138 | 130 | |||||
| Average Months Delinquent | 44 | 45 | 47 | 47 | 41 | |||||
| Average Loan Balance ($000) | 192.8 | 195.2 | 230.4 | 214.3 | 199.0 | |||||
| Geographical Distribution | National | National | National | National | National | |||||
| Winning Bidder | LSF9 Mortgage Holdings, LLC | LSF9 Mortgage Holdings, LLC | LSF9 Mortgage Holdings, LLC | Rushmore Loan Management Services, LLC | Rushmore Loan Management Services, LLC | |||||
| Cover Bid Price (second-highest bid price) |
Mid $80s | Low $80s | Mid $60s | High $40s | Low $50s | |||||
Last year, Freddie Mac's regulator, the Federal Housing Finance Agency, announced enhanced requirements pdffor NPL sales. Additional loss mitigation standards that apply to all the winning bidders on this sale were included for loans with proprietary modifications resulting in a temporary reduction in borrower payments. Specifically, these additional standards include annual rate increases and a cap on the permanent rate after the initial payment reduction period. These changes encourage sustainable modifications that have the potential to give more borrowers the opportunity for home retention.
Advisors to Freddie Mac on the transaction were Wells Fargo Securities, Credit Suisse Securities and The Williams Capital Group, a minority-owned business.
Additional information about the company's NPL sales is at http://www.freddiemac.com/npl/.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog at FreddieMac.com/blog.
The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac does not undertake an obligation, and disclaims any duty, to update any of the information in those documents. Freddie Mac's future performance, including financial performance, is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company's future results are discussed more fully in our reports filed with the SEC.