The winning bidder was LSF9 Mortgage Holdings, LLC. The sale included 1,052 non-performing loans serviced by Ocwen Financial with an aggregate unpaid principal balance (UPB) of $201 million. The loans were offered for sale in a single pool. The loans were sold on May 21 and the transaction is expected to close in July.
The cover bid price, which was the second highest bid, fell in the mid-70s percent of the UPB for the pool of loans. The weighted average BPO was 93 percent, average loan size was $191,177, and the note rate was 5.28 percent, according to Freddie Mac.
The deeply delinquent status of the loans, which are three years delinquent on average, indicates that the borrowers have already been evaluated for or are in some stage of loss mitigation, or are in some stage of foreclosure. Twenty-nine percent of the loans in the pool were loans that were modified that later became delinquent.
Advisors on the transaction were Bank of America Merrill Lynch, Wells Fargo Securities, and Castle Oak Securities. Freddie Mac began marketing the pool of NPLs on April 28 to potential bidders that included non-profits, minority- and women-owned businesses, neighborhood advocacy funds, and private investors.
Winning bidders and their servicers must meet the Federal Housing Finance Agency (FHFA)'s NPL sale guidelines announced on March 2, which include approval by and good standing with government housing agencies (Freddie Mac, Fannie Mae, Ginnie Mae, and the Federal Housing Administration); evaluating borrowers for eligibility in the government's Home Affordable Modification Program (HAMP); and applying a "waterfall" of resolution tactics before resorting to foreclosure.
The Standard Pool Offering NPL sale announced Tuesday was Freddie Mac's third of the year and fourth overall since the first sale occurred in July 2014. The first three sales totaled approximately $1.97 billion in UPB. The previous NPL sale by Freddie Mac, completed on March 25, was its largest bulk NPL sale ever – it included nearly 5,400 loans totaling $985 million in UPB.