August 12, 2015
Freddie Mac announced Thursday that it is preparing to auction off a $1.2 billion pool of “deeply delinquent” non-performing loans.
The loans are currently being serviced by Ocwen Financial (OCN).
The pool of loans is being offered as part of Freddie Mac’s Standard Pool Offerings program.
The pool of loans is being marketed as five geographically diversified pools and are offered via an auction process, Freddie said.
Freddie said that all eligible bidders, including private investors, minority and women-owned businesses, non-profits and neighborhood advocacy funds are encouraged to bid.
The winning bidder will be determined on the basis of economics, subject to meeting Freddie Mac's internal reserve levels, Freddie said. To participate, all potential bidders require approbal by Freddie Mac to access the secure data room containing information about the NPLs and to bid on the NPL pool.
Advisors to Freddie Mac on the transaction are Credit Suisse Securities, Wells Fargo Securities and First Financial Network.
The sale will mark the second large sale of Ocwen-serviced loans that Freddie Mac has undertaken in 2015.
In May, Freddie Mac sold 1,052 deeply delinquent Ocwen-serviced non-performing loans from its mortgage investment portfolio.
According to Freddie's report of the first Ocwen-serviced NPL sale, the loans had an aggregate unpaid principal balance of $201 million and were offered as a single pool of mortgage loans to LSF9 Mortgage Holdings.
The cover bid price (the second highest bid) was in the mid 70s percent of unpaid principal balance. Weighted average broker price opinion loan-to-value, average loan size and note rate are 93%, $191,177 and 5.28%, respectively.
The loans had 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, Freddie said of that first pool.
Bids on the new NPL pool are due from qualified bidders on Sept. 9 and the sale is expected to settle in Oct. 2015.