Freddie Mac puts $1bn in NPLs up for sale

Freddie Mac has put $1.039bn of non-performing residential mortgage loans up for sale.

Real Estate Capital‘s sister magazine PDI can reveal that interested firms must submit indicative bids for the invitation-only auction by 24 March, said two sources familiar with the situation.

The loans have been divided into three pools with unpaid principle balances totalling $664m, $249m and $125m. The assets underlying the two largest pools are geographically diversified across the United States while the $125m pool all relate to housing in New York, the sources said.

A spokesperson for Freddie Mac declined to comment on the sale but added that the lender will publish information about portfolio sales after signing any deal.

Freddie Mac only recently began selling off its non-performing loan assets. The first sale was in summer last year with the most recent sale made up of three pools of loans with unpaid balances totalling $392m. Those three pools attracted bids in the low 90s, the mid-70s and the mid-50s, according to a release from Freddie following the sale in February.

The assets up for sale now have attracted a lot of interest, said Luis Vergara, a managing director with Mission Capital Advisors, a real estate debt provider and loan portfolio sale advisor.

Real estate NLP supply has far from met the demand for such assets from investors, said Vergara. He anticipates that the number of NPL sales from Freddie and fellow state-controlled mortgage provider, Fannie Mae, will tick-up.

Mission Capital has also found that US regional banks are also increasing their NPL sales with a fourfold increase last year versus 2013, said Vergara.