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GSEs Issue Report on Non-Performing Loans

The Federal Housing Finance Agency (FHFA) has released the latest report on the sale of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the GSEs). The Enterprise Non-Performing Loan Sales Report [1] includes sales information about NPLs sold through June 30, 2022. Borrower outcomes reflect NPLs sold through December 31, 2021.

The FHFA reports that the sale of NPLs reduces the number of delinquent loans in the GSEs' portfolios and transfers credit risk to the private sector. FHFA and the GSEs impose requirements on NPL buyers designed to achieve more favorable outcomes for borrowers than foreclosure.

The report shows that the GSEs sold 155,034 NPLs with a total unpaid principal balance (UPB) of $28.7 billion from program inception in 2014 through June 30, 2022.

The loans included in the NPL sales had an average delinquency of 2.8 years, and an average current mark-to-market loan-to-value (LTV) ratio of 86% (not including capitalized arrearages).

NPL Sales highlights include:

Borrower outcome highlights include:

Fannie Mae offers and sells NPLs through a National Pool Offering (NAT), and Freddie Mac offers and sells NPLs through a Standard Pool Offering (SPO). These Pools are generally large and geographically diverse, although some may be geographically concentrated.

Each GSE also offers Pools structured to attract diverse participation by non-profits, small investors, and minority- and women-owned businesses. Fannie Mae refers to these pools as Community Impact Pools (CIPs), and Freddie Mac refers to these pools as Extended Timeline Pool Offerings (EXPOs). CIPs and EXPOs are smaller sized pools and are typically geographically concentrated. The timeline between transaction announcement and the bid due date is approximately two weeks longer than the typical marketing period, providing smaller investors more time to secure funds to participate in the NPL sale.