Subject to market conditions, Freddie Mac plans to periodically sell seriously delinquent non-performing loans (NPLs) it owns via competitive auctions. NPL sales are an important tool for the company to more effectively manage credit losses on its delinquent loan portfolio.
Freddie Mac determines the loan criteria and works with its legacy servicers to identify loans that meet the selection criteria. Freddie Mac controls all pooling and auction related decisions; consistent with FHFA requirements and guidelines governing NPL Sales by Government Sponsored Enterprises (GSEs).
Pools will be offered in two forms:
Standard Pool Offering® (SPO®): These pools are likely to be large, geographically diverse pools, although they may be geographically concentrated.
All eligible bidders, including private investors, MWOBs, non-profits and neighborhood advocacy funds, are encouraged to participate in all of Freddie Mac's NPL offerings – both SPOs and EXPOs. Winning bidders are chosen on the basis of price, subject to meeting Freddie Mac's internal reserve levels.
How to Participate
Interested potential investors may register to request to be added to the distribution list for Freddie Mac’s NPL offerings.
Each auction will generally include NPLs serviced by one servicer, and may include one or more pools of loans. The loans included in each pool may vary significantly by servicer, depending on each servicer's geographical and servicing footprint.
To participate in an offering, potential bidders are required to be approved by Freddie Mac to both access the secure data room containing information about the NPLs and to bid on the NPL pool(s):
If a pool is awarded, the winning bidder is required to make a non-refundable good faith deposit within two business days.
In the event that an auction winner either (i) fails to pay the deposit or (ii) fails to close on the transaction, Freddie Mac reserves the right to deny that auction winner from participating in future transactions.