Freddie Mac periodically sells 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 for potential sale and works with its legacy servicers to identify loans that meet the selection criteria. Freddie Mac controls all pooling and auction related decisions, and such decisions must be 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 generally large, geographically diverse pools, although they may be geographically concentrated. The typical marketing period between transaction announcement and bid due date is 3 weeks.
All eligible bidders, including private investors, MWDOBs (Diverse Investors), 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 and are subject to meeting Freddie Mac's reserve levels.
How to Participate
Potential bidders in any offering must complete a:
and meet the bidder and servicer qualification requirements. Document links provided here are example forms only. Actual qualification documents will be provided after each offering’s announcement.
Interested potential investors may register to request to be added to the distribution list for Freddie Mac’s NPL offerings. All new offerings will be publicly announced and identified on the Freddie Mac website shortly after launch.
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 of notice of win.
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.