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GOVERNMENT INVESTMENT PROPERTY PRESERVATION SERVICING TECH
UPDATES
ON GSE NPL
SALES
e Federal Housing Finance Agency
(FHFA) recently released the latest report on
the sale of nonperforming loans (NPLs) by
Fannie Mae and Freddie Mac. e Enterprise
Non-Performing Loan Sales Report includes
information about NPLs sold through June
30, 2019 and reflects borrower outcomes on
NPLs sold through December 31, 2018, and
reported through June 30, 2019. e sale of
NPLs reduces the number of 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.
is report shows that, through June 30,
2019, the GSEs sold 117,466 NPLs with a
total unpaid principal balance (UPB) of $22.2
billion. NPLs sold had an average delinquency
of 3.0 years and an average loan-to-value ratio
of 92%.
NPLs in New Jersey, New York, and
Florida represented nearly half (45%) of the
NPLs sold. ese three states accounted for
47% of the Enterprises' loans that were one
year or more delinquent as of December 31,
2014, prior to the start of NPL program sales
in 2015. Fannie Mae sold 78,281 loans and
Freddie Mac sold 39,185 loans.
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 (36.6% foreclosure avoided
versus 14.9% for vacant properties). NPLs
on vacant homes had a much higher rate of
foreclosure, more than double the foreclosure
rate of borrower-occupied properties (73.4%
foreclosure versus 31.4% 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.
