Freddie Mac announced the auction sale of 3,564 non-performing residential first lien loans (NPLs) from its mortgage-related assets 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 are now servicing the loans, which have a total balance of roughly $586 million. The transaction, which is part of Freddie Mac’s Standard Pool Offerings (SPO), is slated to close in November 2023.

On August 28, 2023, Freddie Mac began marketing the transaction to potential bidders, including non-profits and Minority, Women, Disabled, LGBT, Veteran, or Service-Disabled Veteran-Owned Businesses (MWDOBs), neighborhood advocacy organizations, and private investors active in the NPL market, through its advisors. Qualified bidders must submit bids for the next Extended Timeline Pool Offering (EXPO), which is a smaller pool of loans, by October 19, 2023.

The loans were issued as two different pools of mortgage loans for the SPO offers. Mortgage loans backed by geographically diversified properties comprise the two pools. Investors might bid on each pool individually or on any combination of pools.

Given the loans’ default state, the borrowers have most likely been considered for loss mitigation, such as modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously changed and then became late account for approximately 53% of the total pool balance. Furthermore, purchasers must uphold the terms of existing loss mitigation agreements and, except in restricted circumstances, solicit distressed borrowers for additional help, as well as finish all pending loss mitigation activities.

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