Freddie Sells $1.4 Billion Of Seriously Delinquent Loans

[Mike Kennedy]

* poster note ................which should never have been made in the first place.

http://freddiemac.mwnewsroom.com/pr...550?feed=429e0be3-9aef-4a3a-9775-43f8e470d510

 

[Michael S]

Assuming the winning bid was slightly higher than the second place bid I came up with a total of about $500 million paid, or about $0.36 on the dollar. I'm sure there's some dogs in there but I suspect that those investors will make out pretty well foreclosing on those properties and selling them off. They indicated the LTV is close to 100% based on BPOs. Even if those are all 20-30% high the buyers will still come out on top assuming they can take possession of the properties fairly quickly.

Also, it's pretty messed up that there are people who are 3-4 years delinquent on their mortgage and may still be living there rent free. I know we're supposed to blame the big bad banks that loaned them too much money but it takes two to tango and these borrowers initiated the process. 3-4 years of free rent is a pretty good tradeoff if you didn't put much money in in the first place and don't mind bad credit for a while. They might still get another 6-12 months (or more) while the new lenders start foreclosure proceedings.

 

[Mike Kennedy]

The Leading Partner in the Tango is required by federal (and state) laws to practice "safe and sound" lending practices and perform necessary due diligence - the borrowers are tasked with no similar legal responsibility unless the Lenders insist upon it. Fogging a mirror never did constitute sufficient credibility for loan repayment. Still doesn't. The Lead tango partners will not adhere to the letter of the Laws unless the Feds and State Regulators insist upon it. This week Lead Partner Fred is a loan officer, next week an underwriter, the following week he begins gainful employment as a Fed Regulator. The names and faces change, the golf game and the players remains the same. "Do The Deal!".

 

[Peter LeQuire]

Is Freddy doing the non-profits and women and minority owned business a favor by marketing the deeply troubled loans to them?

"Freddie Mac, through its advisors, began marketing the transaction on January 21, 2016, to potential bidders, including minority and women-owned businesses (MWOBs), non-profits, neighborhood advocacy funds and private investors active in the NPL market."

 

[timd354]

Even if those are all 20-30% high the buyers will still come out on top assuming they can take possession of the properties fairly quickly.

Therein is the rub. New mortgage servicing laws and foreclosure laws makes it very difficult to take possession of properties very quickly anymore.

 

[KYLECODY]

Therein is the rub. New mortgage servicing laws and foreclosure laws makes it very difficult to take possession of properties very quickly anymore.

depends on the State. Its a quick walk generally in AZ.