More than $800 million in slightly past due and reperforming mortgages have been sold through an auction by the Federal Home Loan Mortgage Corp.
Freddie Mac disclosed Wednesday that it sold 3,514 single-family loans with a collective unpaid principal balance of $817 million through a seasoned loan structured
transaction.
Included in the portfolio are
seasoned residential loans that are either re-performing or are moderately delinquent, the McLean, Virginia-based organization said.
The loans are fixed- and step-rate modified loans. The loan-to-value ratio on the pool is around 98 percent based on broker price opinions.
Nationstar Mortgage LLC, doing business as Mr. Cooper, is servicing the mortgages.
Qualified buyers in these transactions must be investors
with significant experience in managing performing and moderately delinquent loans and securitizing mortgages.
The winning bidder was
Cerberus-affiliate Towd Point Master Funding LLC, which was also the winning bidder in at least two other government-sponsored enterprise re-performing loan sales since last year.
It was the third and largest such transaction to date for Freddie.
“This transaction will involve a two-step process,” the secondary mortgage lender said. “The initial step involves the sale of the loans via a competitive bidding process subject to a securitization term sheet. The sale will be executed on the basis of economics, subject to meeting Freddie Mac’s internal reserve levels. The second step will require the purchaser of the loans to securitize the loans.”
Freddie will
guarantee and purchase the senior tranche of the securitization, while the first-loss subordinate tranche will be retained by Towd Point.
Freddie began marketing the sale of the mortgages in August.
The loans are being sold from Freddie’s investment portfolio, which was last reported at $271 billion as of Aug. 31.
The transaction is expected to settle in November.
