Nearly $1 billion in government-sponsored enterprise residential loans are being marketed for sale. The mortgages are either slightly past due or reperforming.
Bids are being being taken on re-performing and moderately delinquent single-family loans that have a collective unpaid principal balance of approximately $983 million.
Included in the pool are loans modified through the Home Affordable Modification Program and through GSE proprietary modifications.
Freddie Mac announced the offering on Tuesday. The loans will be sold from its investment portfolio, which was last reported at $277 billion as of July 31.
Nationstar Mortgage LLC is currently servicing the loans.
According to the McLean, Virginia-based company, the transaction will involve a two-step process. The first step is the sale of the loans through a competitive bidding process, while the second step will require the purchaser to securitize the loans and
retain the first loss subordinate tranche. Freddie will guarantee and acquire the guaranteed security issued from such securitization.
“A key requirement of this transaction is that the buyer of the loans, and therefore the subordinate tranche, be an investor with substantial experience in managing both performing and moderately delinquent mortgage loans as well as securitizing mortgage loans,” the announcement stated.
Credit Suisse Securities (USA) LLC and The Williams Capital Group LP are serving as advisors to Freddie on the transaction.
