Fannie Mae and Freddie Mac have sold 75,502 nonperforming loans as of December 2016, with a total unpaid balance of $14.2 billion, according to the Non-Performing Loan Sales Report released by the Federal Housing Finance Agency today. On average, the NPLs had a delinquency of 3.4 years and an average current loan-to-value ratio of 97 percent. Nearly half of the NPLs sold came from New Jersey, Florida and New York.
The report also surveyed borrower outcomes based on data from the 45,446 NPLs sold since June 30, 2016. As of Dec. 31, 2016, 41 percent of these NPLs had been resolved; 17 percent with foreclosure and 41 percent without. The data showed that foreclosure avoidances were highest when homes were occupied by borrowers — only 10.1 percent of vacant properties avoided foreclosure, compared to 18.8 percent when homes were borrower-occupied. The report also compared the foreclosure rate among sold NPLs to a benchmark of similarly delinquent loans that were not sold, noting that sold NPLs resulted in fewer foreclosures.
The sale of NPLs by the GSEs is intended to help reduce the number of seriously delinquent loans Fannie and Freddie own by transferring credit risk to the private sector. The GSEs sell NPLs through national pool offerings, which include pools specifically structured to attract diverse participation by nonprofits, small investors and minority and women-owned businesses.