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MCLEAN, Va. - Freddie Mac (FMCC), the mortgage finance company with a market capitalization of $16.33 billion and current stock price of $5.07, is set to auction approximately $290 million worth of non-performing loans (NPLs), as part of its strategy to reduce less-liquid assets from its mortgage-related investments portfolio. The loans up for sale are seasoned, deeply delinquent residential first lien whole loans, serviced by various entities including Select Portfolio Servicing Inc., Newrez LLC, and Nationstar Mortgage LLC.According to InvestingPro analysis, Freddie Mac maintains strong financial health with a current ratio of 131.78, indicating robust liquidity management. The company’s stock has shown remarkable performance, delivering a 352.68% return over the past year.
The sale will be structured through four pools, with three Standard Pool Offerings (SPO) and one Extended Timeline Pool Offering (EXPO), the latter designed to encourage participation from smaller investors and diverse businesses, such as Minority, Women, Disabled, LGBTQ+, Veteran, or Service-Disabled Veteran-Owned Businesses (MWDOBs). Interested bidders are required to submit their bids by March 27, 2025, for the SPO pools, and by April 10, 2025, for the EXPO pool.
Freddie Mac has a history of selling NPLs and securitizing re-performing loans (RPLs) to manage its portfolio effectively. Since 2011, the company has sold $10.4 billion of NPLs and securitized about $79.6 billion of RPLs through various programs aimed at improving borrower outcomes and community stability. With annual revenue of $23.44 billion, the company continues to demonstrate its significant market presence.Want deeper insights into Freddie Mac’s performance? InvestingPro subscribers have access to 12 additional ProTips and comprehensive financial metrics, including detailed Fair Value analysis and expert-curated Pro Research Reports that transform complex Wall Street data into actionable intelligence.
Potential bidders must be approved by Freddie Mac and complete a qualification package to gain access to the secure data room, which contains detailed information about the NPLs and the bidding process. Bids must be submitted on an all-or-none basis for any of the individual pools. Selection of the winning bidder for each pool will be based on economic considerations and Freddie Mac’s internal reserve levels.
BofA Securities, Inc. and First Financial Network, Inc., a woman-owned business, are advising Freddie Mac on this transaction. This sale is part of Freddie Mac’s broader efforts to promote liquidity, stability, and affordability in the housing market, a mission it has pursued since its inception in 1970.
The information provided in this article is based on a press release statement from Freddie Mac.
In other recent news, Freddie Mac has reported a robust financial performance for the fourth quarter of 2024, with a notable 13% increase in net income, reaching $11.9 billion for the full year. The company’s net revenues also rose by 13% year-over-year, totaling $23.9 billion, reflecting a strengthening position in the housing finance market. Freddie Mac’s mortgage portfolio expanded to $3.6 trillion, marking a 3% increase from the previous year, and the company’s net worth grew by 25% to $59.6 billion. In addition, Freddie Mac made significant strides in affordable housing, with 53% of home loans directed towards low and moderate-income families.
The organization also reported a recent decrease in the 30-year fixed-rate mortgage (FRM) to 6.63%, the most substantial drop since mid-September, potentially enhancing homebuying and refinancing opportunities. This development comes as the spring homebuying season begins, with the refinance share of mortgage applications reaching nearly 44%. Freddie Mac’s Chief Economist, Sam Khater, noted that the recent stability in mortgage rates is beneficial for potential homebuyers, as indicated by stronger purchase demand compared to last year. These developments underscore Freddie Mac’s ongoing commitment to promoting liquidity, stability, and affordability in the housing market.
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