A deal has been reached to transfer ownership on nearly $1 billion in severely distressed government-sponsored enterprise residential loans.
The transaction, which was facilitated through the auction process, involves 5,364 mortgages that are deeply delinquent and non-performing.
Four pools that had a collective unpaid principal balance of $962.7 billion were sold at a
weighted average price that wound up in the mid-70s.
The seller in the transaction, the Federal Home Loan Mortgage Corp., announced the sale Wednesday as part of its standard pool offerings.
The McLean, Virginia-based company began marketing the loans on Sept. 8 in five pools totaling $1.1 billion.
Mortgage in the sale have been delinquent for more than two years on average, and the borrowers have likely been evaluated previously for loss mitigation or are already in various stages of mitigation.
Previously modified loans that subsequently became seriously delinquency account for around 48 percent of the loans.
Based on broker-price opinions, the weighted-average loan-to-value ratio is roughly 86 percent.
Freddie Mac sold the loans from its investment portfolio, which was last reported at $319 billion as of July 31.
The loans are currently being serviced by Ditech Financial LLC and Wells Fargo Bank, N.A.
The
transaction is expected to settle in December.
