Freddie Mac Sells Record-Setting $985 Million of Deeply Delinquent Loans

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Freddie Mac announced this past week it sold via auction 5,398 deeply delinquent non-performing loans (NPLs) from its mortgage investment portfolio on March 25th, 2015. The loans have an aggregate unpaid principal balance (UPB) of $985 million. The transaction is expected to settle in early May 2015.

These loans have been delinquent for approximately three 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 24.7% of the aggregate pool balance.

The average loan size and note rate on the aggregate of the three pools were $182,562 and 5.5%, respectively. The aggregate weighted average loan-to-value (LTV) was 76% of the property value, based on Broker Price Opinions (BPO) of the underlying properties.

The loans were offered as three separate pools of mortgage loans, and investors had the flexibility to bid on one or more pools, or bid on the aggregate of all three pools. GCAT Management Services 2015-13 LLC was the winning bidder on all three pools. The cover bid prices (second highest bids) were in the low 80's percent of UPB for Pool #1, in the low 70's percent of UPB for Pool #2 and in the mid 70's percent of UPB for Pool #3.

The three pools include:

Pool #1: 3,577 NPLs with an aggregate UPB of $629.6 million and a BPO LTV of 74%
Pool #2: 1,331 NPLs with an aggregate UPB of $235.9 million and a BPO LTV of 84%
Pool #3: 490 NPLs with an aggregate UPB of $120.0 million and a BPO LTV of 74%