The Federal Housing Finance
Agency reported Monday that Fannie
Mae and Freddie Mac sold a total
of $22.2 billion in non-performing loans in the first half of 2019.
In the last several years, both Freddie Mac and Fannie Mae
have undertaken efforts to shed non-performing loans from their portfolios as
part of an effort to decrease the risk on the taxpayers.
The Enterprise Non-Performing Loan Sales Report shows that the
mortgage giants sold 117,466 NPLs through June 30, 2019. That’s 78,281 NPLs
from Fannie Mae and 39,185 from Freddie Mac.
And the report showed that nearly half of these loans came
from just three states: New Jersey, New York and Florida, with 45% of all NPLs
sold based in these states.
The report also measured borrower outcomes from the NPLs that
were settled by December 31, 2018, and compared to a benchmark of similarly
delinquent enterprise NPLs that were not sold, foreclosures avoided for sold
NPLs were higher.
The highest rate of foreclosure avoidance outcomes came from
NPLs on homes occupied by borrowers at 36.6% of foreclosures avoided, compared
to 14.9% for vacant properties.
The report showed that the rate of foreclosure was much
higher on vacant homes – 73.4%, but pointed out that foreclosures on vacant
homes are an improvement as they reduce blight as the homes are sold or rented
out to new occupants.
Overall, the NPLs sold by the GSEs had an average
delinquency of three years and an average loan-to-value ratio of 92%.
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