The Federal Housing Finance Agency’s (FHFA) report on non-performing loans (NPLs) sold by Fannie Mae and Freddie Mac (the enterprises) through the first half of 2024 showed the enterprises sold 2,969 NPLs, representing an unpaid principal balance (UPB) of $500 million.

As delinquencies have eased since the pandemic and the implementation of loss mitigation programs, the volume of NPL sales also declined and stabilized since 2021, when the enterprises sold 24,164 NPLs totaling an UPB of $4.1 billion, according to the FHFA. As of June 30, loans delinquent one year or more in enterprise portfolios totaled 36,700, an 82 percent decline from the 208,147 NPLs in portfolio at the end of 2021.

On Dec. 31, 2023, the enterprises held 42,667 NPLs in portfolio, of which 7 percent were sold and settled during the first half of 2024.

Other highlights of NPL sales between 2014 and June 30, 2024:

• The average delinquency for pools sold ranged from 1.1 years to 6.2 years.
• Fannie Mae sold 117,437 loans with an aggregate UPB of $21.1 billion, an average delinquency of 2.8 years, and an average LTV ratio of 79 percent.
• Freddie Mac sold 53,896 loans with an aggregate UPB of $10.3 billion, an average delinquency of 2.7 years, and an average LTV ratio of 88 percent.
• NPLs in New Jersey, New York, and Florida represent 39.4 percent of the NPLs sold.

Based on 165,643 NPLs since the program began in 2014 that were settled by Dec. 31, 2023, and reported as of June 30, 2024, NPLS that were sold resulted in fewer foreclosures as compared to similarly delinquent Enterprise NPLs that were not sold.

Of the NPL sales on borrower-occupied homes, 47 percent resulted in foreclosure avoidance, which exceeded the rates for both non-borrower-occupied (44.7 percent) and vacant (17.7 percent).

NPLs on vacant homes had a much higher rate of foreclosure (75.7 percent) than borrower-occupied properties (28.9 percent) and non-borrower-occupied properties (31.8 percent), according to the report.

The average UPB of NPLs sold was $183,055.

Since the program’s inception in 2014, the enterprises sold 171,333 NPLs with a total UPB of $31.4 billion through June 30, 2024. These loans had an average delinquency of 2.8 years and an average current mark-to-market loan-to-value (LTV) ratio of 82 percent. Foreclosure was avoided for borrowers in 40 percent of 165,643 loans sold.