Fannie Mae and Freddie Mac sold 126,757 non-performing loans as of December 31, 2019, with a total unpaid amount of $ 23.8 billion Bad Credit Sales Report published today by the Federal Housing Agency. On average, the NPL had an insolvency of 2.9 years and an average current credit value ratio of 91%. Almost half (44%) of the NPL sold came from New Jersey, New York and Florida.
The report also examined borrowers’ results against the NPL 114,745 billed until June 30, 2019. As of December 31, 2019, 77% of this NPL had been resolved. Avoidance of foreclosures was greatest when borrowers lived in houses – the foreclosure rate for vacant properties was 76.9%, while the foreclosure property rate was 34.4%. The report also compared the enforcement rate among sold NPLs to a benchmark of similar criminal loans that were not sold and found that sold NPLs resulted in fewer foreclosures.
The GSEs’ sale of NPLs is designed to help reduce the number of fannie and Freddie serious crime loans by transferring credit risk to the private sector. The GSEs sell NPLs through national pool offerings, which include pools that are specifically designed to attract a wide range of nonprofits, small investors, and minority and female-owned companies.
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