Freddie sells first offering of delinquent home loans


Freddie Mac (OTCQB:FMCC) has sold $659M of soured mortgages in its first offering of such debt. Twenty-two potential buyers participated in the auction, which was directed by affiliates of Bank of America.

It didn’t disclose the price, and won’t be naming the buyer, according to spokesman Tom Fitzgerald.

Monthly disclosures show that the company held $169.1B of loans as of this past June 30.

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Comments (2)
  • King Rat
    , contributor
    Comments (1557) | Send Message
     
    The sale makes sense in that Freddie wants cash flow and the buyer will want capital appreciation so both will get what they want but as the article quotes: “We’re not going to do transactions that are wealth transfers to private investors,” Freddie Mac Chief Executive Officer Donald Layton said on a conference call with reporters in May.

     

    1) Nobody is going to buy these assets as a form of charity
    2) Nobody is going to buy these assets unless they are already wealthy
    3) ∴ ...
    3 Aug 2014, 07:48 PM Reply Like
  • InTheTube
    , contributor
    Comments (184) | Send Message
     
    This is somewhat troubling, does anyone know if this has ever happened before, Freddie has a charter for this and why they would be doing this (can't be cashflow, company is making billions in profit)? Are these mortgages being sold at a loss or a profit, including any fines collected from the people that sold them to Freddie in the first place?

     

    Or are these simply mortgages too rotten to securitize?

     

    A more in-depth article would be very much appreciated!
    4 Aug 2014, 04:21 AM Reply Like
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