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News Release
FHFA Enhances Requirements for Freddie Mac and Fannie Mae Sales of Non-Performing Loans


Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced enhanced requirements for sales of non-performing loans (NPLs) by Freddie Mac and Fannie Mae (the Enterprises).  FHFA approved NPL sales by the Enterprises to reduce the number of severely delinquent loans held in their inventories and to transfer risk to the private sector.  

"FHFA expects that with these enhanced requirements, NPL sales by Freddie Mac and Fannie Mae will result in more favorable outcomes for borrowers and local communities, while also reducing losses to the Enterprises and, therefore, to taxpayers," said FHFA Director Melvin L. Watt.  "Under the requirements announced today, servicers must consider borrowers for a range of alternatives to foreclosure," Watt said.

Enterprise NPL sales are generally expected to include loans that are severely delinquent, such as loans that are more than a year past due.  Under a pilot program, Freddie Mac sold severely delinquent loans through two transactions in the past six months - one in August 2014 covering $596 million of unpaid principal balance (UPB), and the other on February 5, 2015 covering $392 million of UPB.  FHFA's enhanced requirements for future NPL sales are based, in part, on a review of these initial sales as well as other considerations.

The requirements announced today are expected to encourage broad participation by potential investors and provide for future publication of aggregate data about borrower outcomes.

Link to Related Fact Sheet - updated in 2018

Corinne Russell (202) 649-303​​2 / ​​Stefanie Johnson (202) 649-3030