Freddie Mac has announced it sold via auction 87 non-performing residential first-lien loans (NPLs) serviced by Specialized Loan Servicing LLC to VRMTG ACQ, LLC, a minority and woman-owned business. The sold pool included $22.0 million in UPB and an average loan balance of $253,100. The sale is part of Freddie Mac’s Extended Timeline Pool Offering (EXPO) and the transaction is expected to settle in February 2020. Freddie Mac, through its advisors, began marketing the transaction on October 8, 2019 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 previously evaluated 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 69% of the pool balance.
To date, Freddie Mac has sold over $8 billion of NPLs and securitized more than $59 billion of RPLs consisting of $29 billion in fully guaranteed PCs, $25 billion in Seasoned Credit Risk Transfer (SCRT) senior/sub securitizations, and $6 billion in Seasoned Loan Structured Transaction offerings.
Earlier this month, Freddie Mac announced pricing of the fourth Seasoned Credit Risk Transfer Trust (SCRT) offering of 2019—a rated securitization of approximately $2.3 billion including both guaranteed senior and unguaranteed subordinate securities backed by a pool of seasoned re-performing loans (RPLs).
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2019-4 includes approximately $2.1 billion in guaranteed senior certificates and approximately $229 million in unguaranteed mezzanine and subordinate certificates. The transaction is expected to settle on November 14, 2019. The underlying collateral consists of 12,347 fixed- and step-rate, seasoned RPLs which were modified to assist borrowers who were at risk of foreclosure to help them keep their homes. As of the cutoff date, all of the mortgage loans have been performing for at least 12 months.