A sale of distressed mortgages is the first of its kind for the Federal Home Loan Mortgage Corp.
Freddie Mac disclosed that it has worked out a deal to sell deeply delinquent loans from its investment portfolio.
A competitive auction for the loans was held at the end of July. Affiliates of Bank of America Corp. executed the auction.
There are $659 million in loans involved in the sale.
The secondary mortgage lender previously reported that its total investment portfolio stood at $420 billion as of June 30.
The McLean, Va.-based company was co-advised by Bank of America Merrill Lynch and Credit Suisse Securities.
Freddie said that there were 22 prospective buyers that participated in the event.
“Freddie Mac selected the winning bidder on the basis of economics,” Friday’s announcement said.
The transaction, which is expected to close by the end of August, will be Freddie’s first sale of seriously delinquent loans.
Freddie reports serious delinquency as loans that are at least 90 days past due.
As of the end of June, Freddie’s residential serious delinquency rate was 2.07 percent.
“The transaction was well received by the market and Freddie Mac will continue to look for opportunities to reduce exposure to less liquid assets in its investment portfolio,” the statement said.