Fannie Mae and Freddie Mac have sold 82,359 nonperforming loans as of June 30, 2017, with a total unpaid balance of $16 billion, according to the fourth Non-Performing Loan Sales Report released today by the Federal Housing Finance Agency. On average, the NPLs had a delinquency of 3.3 years and an average current loan-to-value ratio of 97 percent. Nearly half (47 percent) of the NPLs sold came from New Jersey, New York and Florida.
The report also surveyed borrower outcomes based on data from the 69,804 NPLs sold since Dec. 31, 2016. As of June 30, 48 percent of these NPLs had been resolved; 29 percent with foreclosure and 19 percent without. The data showed that foreclosure avoidances were highest when homes were occupied by borrowers — only 9.9 percent of vacant properties avoided foreclosure, compared to 21.2 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.
