Government-backed mortgage company Federal Home Loan Mortgage Corp (OTCBB:FMCC) is offering over $1 billion of nonperforming U.S. home loans. That is the largest debt the company is selling. The sour home loans are being offered in three pools, ranging from the smallest to the largest as $125 million, $249 million and $660 million. The offerings are due on March 24.
Of the three pools of nonperforming housing loans on offer, properties linked to the smallest pool are located in New York. The remaining two pools are dispersed geographically in the U.S.
High demand for debt
With the latest loan sale, Federal Home Loan Mortgage Corp (OTCBB:FMCC) will be making its third large delinquent home loans offering. The company has increased its auction of nonperforming mortgages at a time when demand for the same has also gone up because of housing market rebound. Buyers of the bad loans are able to get them at a discount and many Wall Street firms have been competing to get hold of them.
Experts have cited that traditional nonperforming loan players will certainly show interest in bidding in the latest offer by Freddie Mac. Gary McCarthy of HMC Assets LLC, a firm that invests in sour loans, offering of delinquent loans is something that is likely to continue for quite a period of time.
Improving home value
The major factor that has pushed bidders to raise their offers for delinquent loans is the rising value of homes. With the price of debt rising, lenders are also accelerating their sale of nonperforming home loans. Some the lenders that are taking the favorable debt market environment to sale more delinquent loans are Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM).
A spokesman for Federal Home Loan Mortgage Corp (OTCBB:FMCC), Thomas Fitzgerald, disclosed that the loans in the latest deal are deeply delinquent. The offer includes loans that are two years delinquent.