FHFA: Fannie, Freddie NPL Sales at 155,000

Fannie Mae and Freddie Mac have sold nearly 155,000 non-performing loans with a total unpaid principal balance of $28.7 billion since 2014, the Federal Housing Finance Agency reported.

The Enterprise Non-Performing Loan Sales Report said Fannie Mae and Freddie Mac sold 154,972 NPLs with a total unpaid principal balance (UPB) of $28.7 billion from program inception in 2014 through December 31, 2021. The loans included in the NPL sales had an average delinquency of 2.8 years and an average current mark-to-market loan-to-value ratio of 86 percent (not including capitalized arrearages).

The report said the average delinquency for pools sold ranged from 1.1 years to 6.2 years.

Fannie Mae sold 104,467 loans with an aggregate UPB of $19.0 billion, an average delinquency of 2.8 years and an average LTV of 84 percent. Freddie Mac sold 50,505 loans with an aggregate UPB of $9.7 billion, an average delinquency of 2.7 years and an average LTV of 90 percent.

NPLs in New Jersey, New York and Florida represent 41 percent of the NPLs sold.

The report also noted compared to a benchmark of similarly delinquent Enterprise NPLs that were not sold, foreclosures avoided for sold NPLs were higher than the benchmark. NPLs on homes occupied by borrowers had the highest rate of foreclosure avoidance outcomes (42.3 percent foreclosure avoided versus 17.1 percent for vacant properties).

NPLs on vacant homes had a much higher rate of foreclosure, more than double the foreclosure rate of borrower-occupied properties (77.9 percent foreclosure versus 33.7 percent for borrower occupied properties). Foreclosures on vacant homes typically improve neighborhood stability and reduce blight as the homes are sold or rented to new occupants.

The average UPB of NPLs sold was $185,292.