Freddie Mac Sells Off $1.1 Billion of Delinquent Ocwen-Serviced Loans

Freddie Mac announced Wednesday that it sold via auction 5,208 “deeply delinquent” non-performing loans serviced by Ocwen Loan Servicing, LLC, the mortgage servicing arm of Ocwen Financial Corporation (NYSE: OCN).

The transaction is expected to settle in October 2015, and servicing will be transferred post-settlement. The sale is part of Freddie Mac’s Standard Pool Offerings. 

The loans were offered as five separate pools of mortgage loans, and investors were able to bid on one or more pools, or big on the aggregate of all five.

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LSF9 Mortgage Holdings, LLC, was the winning bidder of three pools; the first (Pool #1) totaling $486.4 million in unpaid principal balance (UPB); Pool #3 totaled $288.4 million in UPB; and Pool #5 at $47.8 million in UPB. 

Pool #1 comprised of 2,201 loans, while Pool #3 totaled 1,253 and Pool #5 was made up of 488 loans. The combined loan to value ratio (CLTV) range for each was 50 to 110; above 110; and less than 50, respectively.

The average months delinquent ranged from 40 months on Pool #1, 47 months on Pool #3 and 35 months on Pool #5. 

Pretium Mortgage Credit Partners I was named the winning bidder on Pool #2, which totaled $158.1 million in UPB and comprised 700 loans. The average months delinquent on this pool was 39 months, and the CLTV range was 50 to 110. 

Lastly, OSAT Sponsor II, LLC, was the bidder of Pool #4, which totaled $127.9 million in UPB and a loan count of 566. The CLTV range was above 110 and the average months delinquent was 46. 

All of the loans across all five pools have a national geographic distribution, and have been delinquent for approximately 3.5 years, on average. 

“Given the deep delinquency status of these loans, the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure,” Freddie Mac said in a written statement.  

Through its advisors, Freddie Mac began marketing the transaction on August 13, 2015, to potential bidders, including minority and women owned businesses, non-profits, neighborhood advocacy funds and private investors active in the non-performing loans market.

Written by Jason Oliva

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