Freddie Mac has sold via auction 68 non-performing residential first lien loans (NPLs) serviced by Select Portfolio Servicing Inc. to Restora LLC. Restora LLC is majority owned by Restorative Neighborhood Resources LLC (RNR).
Skid Row Housing Trust is the sole member of RNR. It provides permanent supportive housing so that people who have experienced homelessness, prolonged extreme poverty, poor health, disabilities, mental illness and/or addiction can lead safe, stable lives in wellness.
The sale is part of Freddie Mac’s Extended Timeline Pool Offering (EXPO), and the transaction is expected to settle in January 2022. Freddie Mac, through its advisors, began marketing the transaction in September to potential bidders, including non-profit organizations and minority, women, disabled, LGBT, veteran or service-disabled veteran-owned businesses (MWDOBs), neighborhood advocacy organizations and private investors active in the NPL market.
Given the delinquency status of the loans, the borrowers have likely been evaluated previously for loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 94% percent of the pool balance. Also, purchasers are required to honor the terms of existing loss mitigation agreements and solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed.
Advisors to Freddie Mac on the transaction are Citigroup Global Markets Inc. and First Financial Network Inc., a woman-owned business. Freddie Mac’s seasoned loan offerings are focused on reducing less-liquid assets in the company’s mortgage-related investments portfolio in an economically sensible way. This includes sales of NPLs, securitizations of re-performing loans (RPLs) and structured RPL transactions.