Freddie Mac has announced the upcoming auction of a $233 million pool of nonperforming loans (NPLs) serviced by Ocwen Loan Servicing.
The geographically diverse pool of deeply delinquent NPLs will go up for bids on May 20, and the sale is expected to settle in July, the company says in a release.
The sale is in part a result of Ocwen's recent efforts to reorganize after a spate of regulatory enforcement actions that nearly crippled its operations, ravaged its stock and strained its relationships with investors. As a result of these actions, the company recently decided to discontinue servicing agency-backed mortgages.
Last month, Ocwen announced that its subsidiary, Ocwen Loan Servicing, was selling an additional $25 billion in mortgage servicing rights (MSRs) to Nationstar Mortgage, an indirectly held, wholly owned subsidiary of Nationstar Mortgage Holdings Inc. That portfolio consists of approximately 142,000 loans owned by Freddie Mac and Fannie Mae. In February, Ocwen announced that it had agreed to sell $9.8 billion in agency-backed MSRs to Nationstar.
Also in March, the company announced that it was selling servicing rights on a portfolio consisting of about 55,500 loans owned by Freddie Mac – with a total principal balance of approximately $9.6 billion – to Green Tree Loan Servicing, an indirectly held, wholly owned, subsidiary of Walter Investment Management Corp.
In addition, the Wall Street Journal recently reported that Ocwen has agreed to sell $45 billion of agency-backed MSRs to JPMorgan Chase & Co.
Earlier this month, Freddie Mac announced that it is now selling its NPLs in smaller pools and marketing them for a longer period of time so as to give smaller investors a crack at them.
This is being done through the company's Extended Timeline Pool Offering program – part of its effort to divest itself of deeply delinquent NPLs in order to reduce taxpayer risk. The first pool of loans offered through the new program has an aggregate unpaid principal balance of $35 million. All are secured by properties located in Miami-Dade County, Fla.
Freddie Mac says offering the NPLs in smaller pools and marketing them for longer will give smaller investors a better chance of coming up with the funds needed to buy them.
The company also reports that it has launched a new Web page for investors providing information on future NPL sales, located at http://www.freddiemac.com/npl/.