Freddie Mac Auctions Off $586 Million in NPLS


Freddie Mac has sold via auction 3,564 non-performing residential first lien loans (NPLs) from its mortgage-related investments portfolio. 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 currently service the loans, with a balance of approximately $586 million.

The transaction is expected to settle in November 2023. The sale is part of Freddie Mac’s Standard Pool Offerings (SPO). Freddie Mac, through its advisors, began marketing the transaction on August 28, 2023 to potential bidders, including non-profits and minority, women, disabled, LGBT, veteran or service-disabled veteran-owned businesses, neighborhood advocacy organizations and private investors active in the NPL market.

For the SPO offerings, the loans were offered as two separate pools of mortgage loans. The two pools consist of mortgage loans secured by geographically diverse properties. Investors had the flexibility to bid on each pool individually and/or any combination of pools.

VRMTG ACQ, LLC, a minority and woman-owned business, was the winning bidder of the two SPO pools.

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 53% of the aggregate pool balance.

Additionally, 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.

Bids for the upcoming Extended Timeline Pool Offering, which is a smaller sized pool of loans, are due from qualified bidders by October 19, 2023.

Advisors to Freddie Mac on the transaction are Wells Fargo Securities LLC and First Financial Network Inc., a woman-owned business.

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