Freddie Mac Announces First Seriously Delinquent Loan Sale of 2015

Freddie Mac Seriously Delinquent Mortgage LoansIn the first bulk sale of seriously delinquent mortgage loans from its portfolio in 2015, Freddie Mac announced on Tuesday it has auctioned off 1,975 deeply delinquent non-performing loans with an aggregate unpaid balance of approximately $392 million.

The loans that were sold in the auction were an average of three years delinquent on mortgage payments, according to Freddie Mac, meaning that the borrowers for all the loans are all likely in some stage of mitigation – either loan modification, a foreclosure alternative such as a short sale or deed-in-lieu of foreclosure, or actually in foreclosure. Loans that were modified and later became delinquent made up about 24 percent of the aggregate pool, according to Freddie Mac.

The loans were offered as three separate pools. The winning bidder for both Pool No. 1 and Pool No. 2 was Pretium Mortgage Credit Partners/Loan Acquisition, LP. The winning bidder on Pool No. 3 was Bayview Acquisition, LLC.

Pool No. 1 included 752 non-performing loans with an aggregate unpaid balance of $136.2 million and a broker price opinion loan-to-value of 74 percent; Pool No. 2 included 468 non-performing loans with an aggregate UPB of $102.4 million and a BPO LTV of 100 percent; and Pool No. 3 included 755 non-performing loans with an aggregate UPB of $153.1 million and a BPO LTV of 135 percent. According to Freddie Mac, the average loan size on the aggregate of the three loan pools was $198,400, and the average note rate was 5.39 percent. The aggregate weighted average LTF was 96.1 percent of the property value based on BPOs, according to Freddie Mac. The winning bidders must meet certain servicer qualification requirements.

Freddie Mac first announced the auction for these three pools of deeply delinquent loans on January 21, with Bank of America Merrill Lynch, Credit Suisse and The Williams Capital Group acting as advisors for the transaction. The conservator for both Freddie Mac and its fellow GSE, Fannie Mae, is requiring the two Enterprises to reduce the number of delinquent loans in their portfolios. Fannie Mae has yet to sell any of its delinquent loans in bulk quantity; Freddie Mac sold its first bundle of delinquent loans for $659 million in July 2014.

Freddie Mac Announces Single Sponsor Multifamily K-Deal Backed by …

MCLEAN, VA, Mar 04, 2015 (Marketwired via COMTEX) –
Freddie Mac (otcqb:FMCC) today announced a new offering of
Structured Pass-Through Certificates (“K Certificates”), which are
multifamily mortgage-backed securities. The company expects to issue
approximately $734.5 million in K Certificates (“K-KA Certificates”),
which are primarily backed by student housing properties owned by
funds managed by Kayne Anderson Real Estate Advisors, LLC. The K-KA
Certificates are expected to price the week of March 2, 2015, and
settle on or about March 18, 2015. This is Freddie Mac’s fourth K
Certificate offering and its second single sponsor K-deal this year.

The K-KA Certificates are backed by 17 recently-originated
multifamily mortgages and are guaranteed by Freddie Mac. The K-KA
Certificates will be offered to the market by a syndicate of dealers
led by Wells Fargo Securities, LLC and Credit Suisse Securities (USA)
LLC, as co-lead managers and joint bookrunners. J.P. Morgan
Securities LLC, Morgan Stanley Co. LLC and Stern Brothers Co.
will serve as co-managers.

The K-KA Certificates will not be rated and include one senior
principal and interest class and one interest only class. The K-KA
Certificates are backed by corresponding classes issued by the FREMF
2015-KKA Mortgage Trust (“K-KA Trust”) and are guaranteed by Freddie
Mac. The K-KA Trust will also issue Class B Certificates, which will
be subordinate to the classes backing the K-KA Certificates. The K-KA
Trust Class B and R Certificates will not be guaranteed by Freddie
Mac.

Freddie Mac Multifamily is a leading issuer of agency-guaranteed
structured multifamily securities. K-Deals are part of the company’s
business strategy to transfer a portion of the risk of losses away
from taxpayers and to private investors who purchase the unguaranteed
subordinate bonds. K Certificates typically feature a wide range of
investor options with stable cash flows and structured credit
enhancement.

The preliminary offering circular supplement relating to the K-KA
Certificates can be found at
http://www.freddiemac.com/mbs/data/kkaoc.pdf. A Freddie Mac
multifamily investor presentation on the K Certificates deal
structure and multifamily loan portfolio performance data is
available at FreddieMac.com. Freddie Mac also has an online tool for
investors and analysts, Multifamily Securities Investor Access. This
is a central database that houses all post-securitization data from
Investor Reporting Packages to help investors and analysts monitor
K-Deal performance.

This announcement is not an offer to sell any Freddie Mac securities.
Offers for any given security are made only through applicable
offering circulars and related supplements, which incorporate Freddie
Mac’s Annual Report on Form 10-K for the year ended December 31,
2014, filed with the Securities and Exchange Commission (SEC) on
February 19, 2015; all other reports Freddie Mac filed with the SEC
pursuant to Section 13(a) of the Securities Exchange Act of 1934
(Exchange Act) since December 31, 2014, excluding any information
“furnished” to the SEC on Form 8-K; and all documents that Freddie
Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the
Exchange Act, excluding any information furnished to the SEC on Form
8-K.

Freddie Mac’s press releases sometimes contain forward-looking
statements. A description of factors that could cause actual results
to differ materially from the expectations expressed in these and
other forward-looking statements can be found in the company’s Annual
Report on Form 10-K for the year ended December 31, 2014, and its
reports on Form 10-Q and Form 8-K, filed with the SEC and available
on the Investor Relations page of the company’s Web site at
www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov.

Freddie Mac was established by Congress in 1970 to provide liquidity,
stability and affordability to the nation’s residential mortgage
markets. Freddie Mac supports communities across the nation by
providing mortgage capital to lenders. Today Freddie Mac is making
home possible for one in four home borrowers and is one of the
largest sources of financing for multifamily housing. Additional
information is available at FreddieMac.com, Twitter @FreddieMac and
Freddie Mac’s blog FreddieMac.com/blog.

SOURCE: Freddie Mac

(C) 2015 Marketwire L.P. All rights reserved.

Freddie Mac Announces Single Sponsor Multifamily K-Deal Backed by Properties Owned by Kayne Anderson

MCLEAN, VA–(Marketwired – Mar 4, 2015) –  Freddie Mac (OTCQB: FMCC) today announced a new offering of Structured Pass-Through Certificates (“K Certificates“), which are multifamily mortgage-backed securities. The company expects to issue approximately $734.5 million in K Certificates (“K-KA Certificates”), which are primarily backed by student housing properties owned by funds managed by Kayne Anderson Real Estate Advisors, LLC. The K-KA Certificates are expected to price the week of March 2, 2015, and settle on or about March 18, 2015. This is Freddie Mac’s fourth K Certificate offering and its second single sponsor K-deal this year.

The K-KA Certificates are backed by 17 recently-originated multifamily mortgages and are guaranteed by Freddie Mac. The K-KA Certificates will be offered to the market by a syndicate of dealers led by Wells Fargo Securities, LLC and Credit Suisse Securities (USA) LLC, as co-lead managers and joint bookrunners. J.P. Morgan Securities LLC, Morgan Stanley Co. LLC and Stern Brothers Co. will serve as co-managers.

The K-KA Certificates will not be rated and include one senior principal and interest class and one interest only class. The K-KA Certificates are backed by corresponding classes issued by the FREMF 2015-KKA Mortgage Trust (“K-KA Trust”) and are guaranteed by Freddie Mac. The K-KA Trust will also issue Class B Certificates, which will be subordinate to the classes backing the K-KA Certificates. The K-KA Trust Class B and R Certificates will not be guaranteed by Freddie Mac.

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

The preliminary offering circular supplement relating to the K-KA Certificates can be found at http://www.freddiemac.com/mbs/data/kkaoc.pdf. A Freddie Mac multifamily investor presentation on the K Certificates deal structure and multifamily loan portfolio performance data is available at FreddieMac.com. Freddie Mac also has an online tool for investors and analysts, Multifamily Securities Investor Access. This is a central database that houses all post-securitization data from Investor Reporting Packages to help investors and analysts monitor K-Deal performance.

This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (SEC) on February 19, 2015; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2014, excluding any information “furnished” to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information furnished to the SEC on Form 8-K.

Freddie Mac’s press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2014, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

Stop Us If You’ve Heard This One: Home Prices Are Up

We probably sound like a broken record at this point, but: Home prices are up! They rose 5.7% from January 2014 to January 2015, according to a new study.

According to the CoreLogic Home Price Index, which has tracked how tens of thousands of homes have sold and resold over the past 30 years, New York (+5.6%), Wyoming (+8.3%), Texas (+8.3%), and Colorado (+9.1%) all set new highs in the index. The HPI covers 7,267 ZIP codes (60% of total U.S. population) and 1,282 counties (85% of total U.S. population) in all 50 states and Washington, DC, and includes all sales types, including distressed (i.e., foreclosures and short sales).

Surprisingly, those distressed sales actually contributed to the price uptick—they’d been dragging home values down since 2008.

As homeowners continue to enjoy their low interest rates, and opt to stay put rather than list their homes for sale, inventory levels will remain tight, thus driving up prices.

CoreLogic HPI Single Family combined

CoreLogic HPI Single Family combined

Here are the highlights from the report:

  • 27 states and the District of Columbia are within 10% of the prices they peaked at in 2005. That means home values for many owners are nearing values we haven’t seen since before the housing market collapse.
  • The five states with the highest appreciation were Colorado (+9.1%), Michigan (+9%), Texas (+8.3%), Wyoming (+8.3%), and Nevada (+7.6%).
  • Only Maryland (-0.3%) and Connecticut (-1.9%) saw price declines.

Home prices are expected to continue this upward trend and increase 5.3% from January 2015 to January 2016, according to the CoreLogic HPI Forecast. Likewise, Jonathan Smoke, chief economist at realtor.com®, has been projecting 2015 to continue the housing market recovery.

Hidden costs of buying a vacation home

4. Understand tax implications








© Sam Edwards/Getty Images
A couple working out financial details. .


Be sure you’re familiar with the vacation home tax rules, too, before making a purchase. The property will still qualify for the mortgage interest deduction, assuming the combined mortgages on both your homes don’t exceed $1.1 million. And property taxes are fully deductible.

Things get trickier, taxwise, when you use the vacation home as a rental property. “If you rent out your vacation home for more than 14 days a year, you will have to report rental income,” says Jared Callister, a tax attorney in Fresno, Calif. “But you will also be able to deduct rental expenses, like repairs and depreciation.”

What you can deduct depends on how much you use the place personally versus renting it out. Also, most states expect you to pay sales taxes on rental income.

Some cities and counties impose such taxes, too; they may go by other names, such as lodging, accommodations, hotel, bed, tourist or transient occupancy taxes. Be sure to find out whether you’d owe them so you’re not hit with a nasty surprise after you become a vacation-home owner.

Craig Venezia is a real estate writer for the San Francisco Chronicle and author of “Buying a Second Home: Income, Getaway or Retirement.” He and his wife own a second home in the San Francisco Bay Area.

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NAR SURVEY: Majority of Realtors Feel Safe on the Job

Some of the most common circumstances that resulted in fearful situations were open houses, showing vacant and model homes, working with properties that were unlocked or unsecured and showing homes in remote areas.

“When I became NAR president last year, I pledged to make Realtor  safety a priority and develop new education and resources for the industry,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. “It is important to know how safe or unsafe our members feel, what causes them to feel unsafe, and what steps they are taking to keep themselves out of harm’s way, so that we can respond and provide the best tools tailored to our members’ personal safety needs.”

The survey asked members how safe they feel while on the job and nearly 3,000 Realtors® from across the U.S. answered questions about their personal experiences, and the safety procedures and materials provided by their brokerage.

The survey found that one-third of surveyed members carry a self-defense weapon. Female Realtors  are more likely to carry pepper spray, while male Realtors  more commonly carry a firearm. Many agents, 38 percent, have participated in self-defense classes as a proactive safety measure, and 13 percent use a smart phone safety application to track their whereabouts or alert colleagues of an emergency. Also, before showing a property, the typical Realtor  meets about half of their prospective buyers, whom they haven’t previously met, in a real estate office or other neutral location.

Many Realtor  associations, real estate brokerages and offices also make safety resources available to agents. Eighteen percent of members have participated in safety courses provided by their Realtor  association. Forty-six percent of respondents said their brokerage has standard procedures for agent safety in place; however, 54 percent said their brokerage either had no safety measures in place or they were not aware of them.

The safety of its members is a top priority for NAR, and the association will continue to expand its Realtor Safety Program in 2015 by unveiling new materials and applications for members and associations throughout the year.
NAR established the Realtor  Safety Program to empower and inform members of the potential risks they face in this profession and how to navigate them safely. Webinars, safety materials and tips are all made available through the program, with the entire month of September dedicated to bringing more awareness to Realtor® safety among members.

6 Steps to Get the Best Mortgage Rates This Spring

If you’ve got the itch to ditch your landlord and take the leap to homeownership, mortgage rates are still low by historical standards. But beware because they are expected to begin creeping higher throughout the year.

“The cost of renting is really high right now. Rents have been rising and rising,” says Lawrence Yun, chief economist at the National Association of Realtors. “Renters are getting squeezed, and some want to convert to ownership.”.

The NAR expects 30-year, fixed-rate mortgages to average 3.80 percent in the first quarter. However, mortgage rates are forecast to start inching higher throughout the year. The NAR forecasts an average 4 percent rate in the second quarter, 4.3 percent in the third quarter and 4.7 percent in the fourth quarter.

Economic forces, including an improving U.S. labor market and faster economic growth, are conspiring to push mortgage rates higher this year. “The Federal Reserve is likely to raise short-term interest rates in the summer, which will be a signal for the rest of the market for rates to go higher,” Yun says.

“There’s a window of opportunity for buying and refinancing at crazy-low rates, but it’s closing,” says Gina Pogol, loan expert at Charlotte, North Carolina-based LendingTree.

If this is the year you want to sign on the dotted line and become a homeowner, experts have several suggestions to help you move quickly through the mortgage approval process.

The overall lending environment remains stringent, and the best mortgage rates will be awarded to those with higher credit scores. Your credit score is a three-digit number generated using information on your credit report, and generally, the higher it is, the better. Here’s what you need to do to get the best rates.

Mind your credit score. “Minimum credit scores required by lenders have steadily dropped, and mortgage insurers’ underwriting guidelines have also loosened a bit, but it’s still a little tough,” Pogol says. “Average FICOs of applicants approved for home loans continue to come down, but they’re still hovering around the 700 mark. Unfortunately, three-fourths of U.S. consumers have scores lower than 700.”

What’s an ideal credit score? “To get the best rate, strive for above 740. That is the benchmark for A-plus lending,” says Jeannie Meronk, assistant vice president and mortgage loan officer at First State Bank of Illinois.

Visit your lender before you hit the open houses. Create a game plan that makes sense for your budget. It pays to talk to a lender about what you can afford and qualify for before you fall in love with a home outside your price range.

“It is really important from a budget standpoint to be shopping in the right price range,” Meronk says.

Just because you qualify for a certain loan amount doesn’t mean that is what you should spend. Consider your monthly budget, and determine what level of monthly payment feels comfortable. Remember that there will be other costs relating to homeownership, including property taxes, maintenance and unexpected repairs.

Also know that most sellers won’t take an offer seriously unless you have been preapproved for a loan. “Preapproval means actually applying for a loan, having your credit checked and your income documented. Preapproved means that as long as the property meets the lender’s requirements, you can close,” Pogol says.

Don’t make any changes to your financial picture. Once you’ve been preapproved, this is not the time to open new credit cards, change jobs, transfer large sums of money or make big-ticket purchases using credit. “Once you are preapproved, don’t apply for any new credit. If you go ahead and finance furniture, it can mess up the amount that you were preapproved for,” Meronk says.

If you are fortunate enough to have a parent, in-law or relative who is willing to gift you some or all of your intended down payment, be sure to talk with your lender about this. You will need to document this properly with a letter for your lender.

If you are thinking of buying a rental property, however, gift money can’t be used toward a down payment. It only can be used for a primary residence, according to Meronk.

If you are self-employed, expect to jump through more hoops. Be prepared to provide two years’ worth of tax returns. If your income fluctuated from one year to the next, underwriters will average the income from the two years. Also, underwriters will look at your income after your business deductions have been taken.

“It often comes as a surprise to self-employed applicants that their gross income isn’t counted by underwriters. It’s their taxable income that’s used. So if you write off every meal and every vacation as a business expense, that comes off the top of your income,” Pogol says.

Organize your financial paperwork and keep it up to date. If you are shopping for a home, keep a file and drop in new documents as you receive them, including your most recent pay stub and all pages of your bank statement.

“Many times applications sit on mortgage processors’ desks because the borrowers have not supplied everything necessary to get the file into underwriting. If an underwriter needs additional information or documents, get that in as quickly as possible. In a busy office, every time your application needs something else, it may be moved to the bottom of a pile and not resurface for days,” Pogol says.

Call your insurance company. Before you close, you will need to procure a home insurance policy. “You need to call your insurance agent and tell them you are buying a house. You need to secure a first year’s home insurance policy before closing. Until I get your homeowners insurance amount, I can’t tell you the exact amount of your payment,” Meronk says.

Energy Efficiency Lending: Why Fannie Mae Deserves Praise

1024px-East_57th_St_Apartments

Credit: Roy Googin

Philip Henderson, of the Natural Resources Defense Council, details Fannie Mae’s innovation in energy efficiency lending for apartment buildings.

Some people might be surprised to learn that Fannie Mae — a company that purchases mortgage loans and sells mortgage-backed securities — is an innovator in energy efficiency. Its new policy to offer a discount on loans for more efficient apartment buildings deserves our recognition and applause.

One should not be surprised by this. Fannie Mae is focused on energy and water efficiency for good reasons — efficiency is an important factor in the housing market, as evidenced by growing numbers of houses and apartment buildings with certifications such as ENERGY STAR, LEED, and Enterprise’s Green Communities standards.

These trends are confirmed in market reports. It’s especially important for residents of affordable housing who can least afford the high cost of wasted energy and water.Fannie Mae’s multifamily team has (once again) shown leadership by implementing this new policy.

There is, however, an interesting surprise in Fannie Mae’s new policy.

First things first: What’s the new policy?

Fannie Mae’s multifamily loans will now offer a discount 10 basis points off of finance charges on loans secured by apartment buildings with certified efficiency standards. (Here is Fannie Mae’s recently-released Fact Sheet).

  • What properties are eligible for the discount? Multifamily rental properties (5 or more units) that are otherwise eligible for a purchase or refinance loan and certified by a recognized standard (ENERGY STARtm, USGBC LEED, or Enterprise’s Green Communities). If the property is subsidized affordable housing, the properties could also obtain the 10 basis point discount on loans to make efficiency-related repairs and improvements using Fannie Mae’s Green Preservation or M-PIRE loans.
  • What is 10 basis points in real money? Fannie Mae offers this example: If the market interest rate is 4 percent on a multifamily loan, the rate with the new discount would be 3.9 percent. On a $10 million loan, with a 30-year amortization, the owner would save $95,000 in interest payments over a 10-year term.

Why this discount makes a ton of sense: better loan quality

If the owner pays a large utility bill directly (such as in a property with a central boiler or central cooling system), a more efficient property will mean lower operating expenses for the owner. This is a fundamental driver of loan quality. Even if residents pay utility bills for their own meters (such as in a property with heating and cooling systems in each separately-metered apartment), it is reasonable to expect lower utility expenses to translate into higher rent to the owner, over time, or better occupancy rates (or both). Again, these are fundamental drivers of loan quality for multifamily mortgage loans.

Lower utility expenses are likely to mean higher property values for energy-efficient buildings. This is perhaps the most important consideration for a lender or investor.Some economists argue that maintaining property value during the life of the loan is the most important determinant of mortgage performance because default is unlikely if a property can be sold for more than the loan amount.

To some extent, simple correlation could also be at work. Some energy-efficient properties might be newer or in better locations than comparable, non-certified properties. Properties that obtain a “green certification” might command higher rents for reasons other than lower utility expenses. And, owners that make efficiency-related repairs using a Green Preservation loan, for example, might be doing work that is preventive maintenance.

Fannie Mae’s discount is backed by experience and results of loans in the Fannie Mae portfolio and by prior studies (see results cited here and here). Even with a sound basis for the policy, one of the important values of the new discount will be more loans on more efficient properties, which should enable analysis and greater certainty as to exactly how utility expenses factor into loan fundamentals. This data then will allow a process of continual improvement and refinement of the loan terms and features.

It’s good news for many

For all these reasons, Fannie Mae deserves to be commended. It’s policy is likely to encourage apartment building owners to invest to make properties more efficient. In so doing, Fannie Mae’s new loan features will deliver many benefits:

  • Better loans will deliver value to Fannie Mae, its investors, and its owners (that’sus!).
  • Residents of more efficient apartment buildings will have lower utility expenses. This is especially important for residents of affordable or low-income housing.
  • Utilities and their customers will benefit from greater energy efficiency.
  • Polluting power plants will pollute less by not making the electricity that would be wasted in less efficient buildings.

The surprise and open question

Fannie Mae’s business is roughly 80 percent single-family houses and 20 percent multifamily apartments. In 2014, Fannie Mae financed 1,824,000 home purchases and refinances, as compared to 446,000 units in multifamily buildings (see 2014 annual results).

Why is the efficiency innovation limited to multifamily loans? High efficiency houses are a rapidly growing segment of the market – some estimate that 30 percent of new houses will be Energy Star-certified by 2016. What is Fannie Mae doing in its single-family business to account for this important trend?

Philip Henderson is an NRDC senior financial policy specialist in Washington, DC. This blog originally appeared in NRDC’s Switchboard.

Ocwen to sell servicing rights on $45 billion of Fannie Mae loans

(Reuters) – Mortgage servicer Ocwen Financial Corp (OCN.N) said it would sell residential mortgage servicing rights on $45 billion of Fannie Mae loans to an undisclosed buyer, sending its shares up 5.5 percent in extended trading.

The announcement comes a week after Ocwen said it would sell servicing rights on $9.8 billion of loans backed by Freddie Mac to Nationstar Mortgage Holdings Inc, as part of a strategy to transfer some types of non-strategic servicing.

Ocwen said on Monday it was on track to sell servicing rights on agency loans of about $55 billion, including the two deals, in the next six months to raise around $550 million.

The company, which warned last month that it would report a quarterly and full-year loss mainly due to high legal expenses, said it would take a goodwill charge of $370 million–$420 million in the fourth quarter.

Mortgage servicers such as Ocwen have grown exponentially since the financial crisis by buying up the rights to service mortgages after new capital regulations made the business too costly for banks to maintain.

But investments in systems and procedures did not keep pace with their expansion, causing headaches for many homeowners.

Ocwen had to pay $150 million in penalties in December related to improper foreclosures. As part of the settlement, the company’s founder and chief executive stepped down.

Ocwen said on Monday it expected the sale of about 277,000 Fannie Mae loans to close by mid-2015, subject to approvals by the government-backed mortgage agency and the U.S. Federal Housing Finance Agency.

Ocwen’s shares were trading at $9.02 after the bell. Up to Monday’s close, the stock had fallen nearly 77 percent in the past 12 months.

(Reporting by Neha Dimri in Bengaluru; Editing by Kirti Pandey)

Ocwen to sell servicing rights on $45 bln of Fannie Mae loans

(Adds details, background, shares)

March 2 (Reuters) – Mortgage servicer Ocwen Financial Corp said it would sell residential mortgage servicing rights on $45 billion of Fannie Mae loans to an undisclosed buyer, sending its shares up 5.5 percent in extended trading.

The announcement comes a week after Ocwen said it would sell servicing rights on $9.8 billion of loans backed by Freddie Mac to Nationstar Mortgage Holdings Inc, as part of a strategy to transfer some types of non-strategic servicing.

Ocwen said on Monday it was on track to sell servicing rights on agency loans of about $55 billion, including the two deals, in the next six months to raise around $550 million.

The company, which warned last month that it would report a quarterly and full-year loss mainly due to high legal expenses, said it would take a goodwill charge of $370 million-$420 million in the fourth quarter.

Mortgage servicers such as Ocwen have grown exponentially since the financial crisis by buying up the rights to service mortgages after new capital regulations made the business too costly for banks to maintain.

But investments in systems and procedures did not keep pace with their expansion, causing headaches for many homeowners.

Ocwen had to pay $150 million in penalties in December related to improper foreclosures. As part of the settlement, the company’s founder and chief executive stepped down.

Ocwen said on Monday it expected the sale of about 277,000 Fannie Mae loans to close by mid-2015, subject to approvals by the government-backed mortgage agency and the U.S. Federal Housing Finance Agency.

Ocwen’s shares were trading at $9.02 after the bell. Up to Monday’s close, the stock had fallen nearly 77 percent in the past 12 months.

(Reporting by Neha Dimri in Bengaluru; Editing by Kirti Pandey)