Freddie Mac has planned its first Extended Timeline Pool Offering, the government-sponsored entity announced this week.
The offering will include deeply delinquent nonperforming loans from its mortgage investment portfolio with an aggregate unpaid principal balance of $35 million located in Miami-Dade County, Fla., according to a press release. Freddie Mac plans to settle the transaction in July 2015.
Unlike previous NPL offerings, Freddie Mac's latest features smaller pool sizes and a longer marketing period, so that smaller investors have more time to secure funds to participate. Bids are subject to meeting Freddie Mac's internal reserve levels.
In general, recently established formal programs for sales of NPLs by the GSEs could help improve the market for U.S. banks looking to sell their own loans, according to Fitch Ratings.
"A deeper NPL market could help further extinguish the GSEs' and banks' crisis period residential mortgage asset quality issues," Fitch said in a report. "At a minimum, the GSEs' NPL sales are an indication of further healing in the U.S. housing market."
While less of a problem now than they were five years ago, 90-plus-day past-due loans remain elevated compared to their historical averages and contributions to total NPL levels. Banks in the U.S. held around $61 billion in 90-plus-day past-due loans at the end of 2014 versus $78 billion a year earlier. Fannie Mae and Freddie Mac, meanwhile, hold around $86 billion, and have seen that figure go down in past years at the same rate as banks.