The sale of more than $300 million in deeply delinquent Freddie Mac residential loans has been completed.
A total of 1,611 non-performing Freddie Mac loans for $305 were sold on Oct. 7 through the auction process.
On average, the loans included in the transaction have been delinquent for around two years.
Two pools were involved in the sale.
One of the pools with $209 million in mortgages was sold to Pretium Mortgage Credit Partners 1. The combined loan-to-value ratio range was less than or equal to 110 percent, while the CLTV ratio based on a broker price opinion was 79 percent. The loans are delinquent an average of 24 months.
The second pool, which was acquired by Bayview Acquisitions LLC, had loans with an aggregate unpaid principal balance of $95 million. The CLTV range exceeded 110 percent, and the BPO CLTV was in excess of 110 percent. The loans were delinquent an average of 26 months.
Freddie sold the loans from its investment portfolio as part of its Standard Pool Offerings.
JP Morgan Chase Bank, N.A., is the servicer on the loans. The servicing will be transferred after the expected settlement date in December.
The new servicers will need to prioritize loan modifications over short sales or deeds in lieu of foreclosure. If the borrowers don’t qualify for a modification through the Home Affordable Modification Program, then they must be considered for proprietary modifications.
When a foreclosure is the only option, sales to owner occupants and non-profits must be encouraged by the servicers.
