NPL SPO & EXPO Transactions

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Freddie Mac determines the loan criteria for potential sale and works with its legacy servicers to identify loans that meet the selection criteria. Freddie Mac controls all pooling and auction related decisions, and such decisions must be consistent with FHFA requirements and guidelines governing NPL sales by Government Sponsored Enterprises (GSEs).

Loan Selection and Scrubbing

Standard Loan Inclusion Criteria:

  • Loans that are deeply delinquent
  • No contested litigation loans
  • No REO

Loans are scrubbed to facilitate preparation of a detailed loan tape for the data room

  • Key loan characteristics, loss mitigation status, etc.


Once aggregate pool is identified, population may be split into separate pools for offering based on:

  • Size
  • Geography
  • Loan characteristics

Pooling decisions are made by Freddie Mac’s transaction team.

Pools will be offered in two forms:

  1. Standard Pool Offering (”SPO”): These pools are generally large, geographically diverse pools, although they may be geographically concentrated. The typical marketing period between transaction announcement and bid due date is 3 weeks.
  2. Extended Timeline Pool Offering (”EXPO”): These pools are generally smaller in size, and may or may not be geographically concentrated. The marketing period will be approximately two weeks longer than the typical marketing period for SPOs. This is intended to provide smaller potential investors extra time to secure funds to participate in the auctions.

All eligible bidders, including private investors, MWDOBs (Diverse Investors), non-profits and neighborhood advocacy funds, are encouraged to participate in all of Freddie Mac's NPL offerings – both SPOs and EXPOs. Winning bidders are chosen on the basis of price and are subject to meeting Freddie Mac's reserve levels.

Bidder and Servicer Qualification Requirements

To participate in an offering, potential bidders are required to be approved by Freddie Mac to both access the secure data room containing information about the NPLs and to bid on the NPL pool(s):

  • Data Room Pre-access Qualification Requirements
    1. A signed bidder Non-Disclosure Agreement.
    2. Attestation, among other things, (1) that bidder is not currently disbarred or suspended from doing business by any federal, state or local government agency, and (2) that bidder has adequate experience managing a portfolio of single-family mortgage loans or securities.
    3. Proof of adequate funds to purchase the pool(s) they propose to bid.
    4. A complete Servicer Due Diligence Questionnaire (DDQ) by the bidder’s proposed new servicer.
  • Approval to bid is contingent upon, among other things:
    1. A background check of bidder’s owners of 10% or more, and capital providers and their owners of 10% or more.
    2. Freddie Mac’s review of Pre-Access Qualification (PAQ) documentation and approval of bidder’s requested servicer.

If a pool is awarded, the winning bidder is required to make a non-refundable good faith deposit within two business days of notice of win.

In the event that an auction winner either (i) fails to pay the deposit or (ii) fails to close on the transaction, Freddie Mac reserves the right to deny that auction winner from participating in future transactions.

How to Participate

Potential bidders in any offering must complete a:

and meet the bidder and servicer qualification requirements. Document links provided here are example forms only. Actual qualification documents will be provided after each offering’s announcement.

Interested potential investors may register to request to be added to the distribution list for Freddie Mac’s NPL offerings. All new offerings will be publicly announced and identified on the Freddie Mac website shortly after launch.