Freddie Mac has sold 2,879 deeply delinquent non-performing loans (NPLs) with an unpaid principal balance of $706.3 million from its mortgage investments portfolio, PERE sister publication Real Estate Capital has reported.
Lone Star Funds affiliate LSF9 Mortgage Holdings, a repeat buyer of delinquent Freddie Mac loan pools, purchased 2,250 of the loans with a $516.6 million balance across four of the five loan pools sold. One of the pools is concentrated solely in New Jersey, while the others represent national portfolios.
Upland Mortgage Acquisition Company II purchased the fifth pool, a New York-only pool made up of the remaining 629 loans with a $189.7 million balance.
The loans, serviced by Bayview Loan Servicing, have been delinquent for almost five years, on average. Mortgages that were modified and subsequently became delinquent comprise approximately 29 percent of the aggregate pool balance, which has a loan-to-value ratio of approximately 92 percent, based on Broker Price Opinion (BPO).
“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,” according to a statement from Freddie Mac.
The transaction is expected to settle in August 2016, and servicing will be transferred post-settlement. The sale part of Freddie Mac’s Standard Pool Offerings (SPO). All five pools were sold at a weighted average price in the mid-60s as a percent of the total unpaid principal balance.
“Through the first quarter of 2016, Freddie Mac sold $4.3 billion in NPLs as part of its strategy to reduce the less liquid assets in its mortgage-related investments portfolio,” according to the statement.