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Federal Home Loan Mortgage Corp (OTCBB:FMCC) said that it sold 5,398 deeply delinquent NPLs from its mortgage investment portfolio in an auction. The non-performing loans have total unpaid principal balance of $985 million. The company expects the transaction to settle in early May 2015.

The details

The non-performing loans sold by Federal Home have been delinquent for about three years. Provided the deep delinquency state of the NPLs, the borrowers have probably been assessed previously for or are already in various phases of loss mitigation. It covers modification or other options to foreclosure, or is in process of foreclosure. Mortgages that were earlier modified and then became delinquent cover 24.7% of the total pool balance.

The process

The NPLs were sold as three different separate pools of mortgage loans. The investors were able to bid on one or more pools. They can even bid on the total of all three pools. The company that won bid on all three pools is GCAT Management Services 2015-13 LLC. The cover bid prices came at the low 80’s percent of Unpaid Principal Balance for Pool-1, in the low 70’s percent for Pool-2 and in the mid 70’s percent of Unpaid Principal Balance for Pool-3.

The pools

Federal Home Loan Mortgage Corp (OTCBB:FMCC) categorized three pools of mortgage loans. The first pool had 3,577 NPLs with total Unpaid Principal Balance of $629.6 million. The second pool contained 1,331 NPLs with total UPB of $235.9 million. The third pool consists of 490 NPLs with an aggregate Unpaid Principal Balance of $120.0 million. The average note rate and loan size on the total of the three pools were 5.5% and $182,562, respectively. Federal Home commenced marketing the offer on March 2, to potential bidders, including private investors, neighborhood advocacy funds, non-profits and minority and women-owned businesses.

In last trading session, Federal Home stock price declined 2.54%to close at $2.30.

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