Government-sponsored enterprise Freddie Mac recently sold off three pools of nonperforming loans (NPLs) with an unpaid principal balance of $985 million to GCAT Management Services.
The loans, which were sold via auction, are expected to transfer in early May.
The loans have been delinquent for approximately three years on average, Freddie Mac says in a release. About 24.7% of the loans were previously modified and subsequently became delinquent. Many are in various stages of loss mitigation.
The average loan size for all three pools is $182,562.
The average weighted loan-to-value is 76% of the property value, based on broker price opinions of the underlying properties.
Freddie Mac reports that it put the notes out for bid on March 2.
Entities that bid on Freddie Mac mortgage servicing rights must be approved by and in good standing with Freddie Mac, Fannie Mae, Ginnie Mae or the Federal Housing Administration.
In addition, servicers that acquire the rights must prioritize loan modifications over short sales or deeds in lieu of foreclosure. Foreclosure must be the last option – and for loans that transition to bank-owned status, servicers must encourage sales to owner occupants and nonprofits.