October 10, 2023

FHFA: Report Announced on the Sale of Non-Performing Loans by the Enterprises

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, 2022. Borrower outcomes reflect NPLs sold through June 30, 2022.

The 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. 

This report reflects activity reported prior to FHFA’s decision in February 2023 to pause Enterprise NPL and RPL Sales during a review of the sales programs. The pause was lifted in June 2023. FHFA also published an updated NPL/RPL Fact Sheet in June 2023 reflecting enhancements to the NPL and RPL sales programs, including:

The December 2022 NPL Sales Report shows that the Enterprises sold 163,297 NPLs with a total unpaid principal balance (UPB) of $30.0 billion from program inception in 2014 through December 31, 2022. 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 84 percent (not including capitalized arrearages).

NPL Sales Highlights:

Borrower Outcomes Highlights:

FHFA will continue to provide reporting on NPL sales borrower outcomes on an ongoing basis. Additionally, FHFA is considering alternative measurements to compare borrower outcomes post-sale to similarly delinquent Enterprise NPLs that were not sold.  

Read the latest Non-Performing Loan Sales Report.

For more information, visit the NPL page on FHFA.gov.​

This post was originally published here.