Freddie Mac has announced it sold, via auction, 88 non-performing residential first lien loans (NPLs) from its mortgage-related investments portfolio to GITSIT Solutions LLC and VRMTG ACQ LLC, a woman-owned business. The loans are currently serviced by Specialized Loan Servicing LLC.
The sale is part of Freddie Mac’s Extended Timeline Pool Offering (EXPO), and the transaction is expected to settle in December 2023. Freddie Mac, through its advisors, began marketing the transaction on August 28, 2023 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 33% 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 EXPO pools and winning bidder are summarized below:
In late September, Freddie Mac announced the sale via auction of 3,564 NPLs from its mortgage-related investments portfolio with a balance of approximately $586 million. The loans were 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.
In early October, Fannie Mae announced the sale of NPLs as part of the company's effort to reduce the size of its retained mortgage portfolio, including the company's 22nd Community Impact Pool (CIP). CIPs are typically smaller pools of loans that are geographically focused and marketed to encourage participation by non-profit organizations, minority- and women-owned businesses (MWOBs), and smaller investors. The one large pool included approximately 1,555 loans totaling $217.5 million in unpaid principal balance (UPB), and the CIP included approximately 60 loans totaling $18.6 million in UPB. The CIP consists of loans geographically located in the New York area. This sale by Fannie Mae of non-performing loans was marketed in collaboration with BofA Securities Inc. and First Financial Network Inc., a woman-owned and -controlled business.
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 Loan Structured Transaction (SLST) program.
Advisors to Freddie Mac on the transaction were Wells Fargo Securities 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.