The Federal Housing Finance Agency (FHFA) today released the latest report on the sale of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the Enterprises). The Enterprise Non-Performing Loan Sales Report includes sales information about NPLs sold through December 31, 2023. Borrower outcomes reflect NPLs sold through June 30, 2023.
The sale of NPLs reduces the number of deeply delinquent loans in the Enterprises’ portfolios and transfers credit risk to the private sector. FHFA and the Enterprises impose requirements on NPL buyers designed to achieve more favorable outcomes for borrowers than foreclosure.
This report shows that the Enterprises sold 168,364 NPLs with a total unpaid principal balance (UPB) of $30.9 billion from program inception in 2014 through December 31, 2023. 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 (LTV) ratio of 83 percent (not including capitalized arrearages).
NPL Sales Highlights:
- The average delinquency for pools sold ranged from 1.1 years to 6.2 years.
- Fannie Mae has sold 114,993 loans with an aggregate UPB of $20.6 billion, an average delinquency of 2.8 years, and an average LTV ratio of 80 percent.
- Freddie Mac has sold 53,371 loans with an aggregate UPB of $10.2 billion, an average delinquency of 2.7 years, and an average LTV ratio of 88 percent.
- NPLs in New Jersey, New York, and Florida represent 40 percent of the NPLs sold.
Borrower Outcomes Highlights:
- The borrower outcomes in the report are based on 160,576 NPLs that were settled by June 30, 2023, and reported as of December 31, 2023.
- 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 (46.9 percent foreclosure avoided versus 17.7 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 (76.0 percent foreclosure versus 29.1 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 $183,312.
FHFA will continue to provide reporting on NPL sales borrower outcomes on an ongoing basis.
Read the latest Non-Performing Loan Sales Report. For more information, visit the NPL Sales page on FHFA.gov.
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The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac, and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $8.4 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter @FHFA, YouTube, Facebook, and LinkedIn.
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