Freddie Mac, which, along with sister company Fannie Mae, recently started selling-off its nonperforming loans (NPLs) to investors for the sake of reducing taxpayer risk, is now selling those loans in smaller pools and marketing them for a longer period of time so as to give smaller investors a crack at them.
The company this week announced its first Extended Timeline Pool Offering, an auction of deeply delinquent NPLs from its mortgage investment portfolio. 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.
In a release, 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.
In order to bid on these loans, as well as to access the secure data room containing information about them, investors must be approved by Freddie Mac.
Bids are due on June 2, and the transaction is expected to settle in July.
Freddie Mac 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/.