Investments Servicing

Fannie Mae to sell $1.65 billion in re-performing loans

GSE announces second sale of previously delinquent loans

House money chalkboard

Earlier in the day on Tuesday, Fannie Mae announced that it sold $1.68 billion in non-performing loans to private equity funds, one of which is a subsidiary of Goldman Sachs.

But that’s not the only loan sale the government-sponsored enterprise announced on Tuesday.

Later in the day, the GSE announced its second sale of re-performing loans, which will be much larger that its first such sale.

Last year, Fannie Mae sold a re-performing loan portfolio that contained 3,500 loans with a total unpaid principal balance of $789.2 million.

In this latest sale, Fannie Mae will be selling a portfolio of re-performing loans that contains 7,600 loans with a total unpaid principal balance of $1.65 billion.

According to Fannie Mae, the sale is part of the company’s ongoing effort to reduce the size of its retained mortgage portfolio.

Per details from Fannie Mae, re-performing loans are mortgages that were previously delinquent, but are now performing again because payments on the mortgages have become current with or without the use of a loan modification.

According to Fannie Mae, the terms of the re-performing loan sale require the buyer to offer loss mitigation options designed to “be sustainable to any borrower who may re-default within five years following the re-performing loan sale.”

Additionally, buyers are required to report on loss mitigation outcomes. Any reporting requirements cease once a loan has been current for six consecutive months after the closing of the re-performing loan sale, Fannie Mae said.

Bob Ives, Fannie Mae’s vice president of retained portfolio asset management, said that that the company was pleased with the response to the first re-performing loan sale, and expects more of the same with this latest sale.

“Last year’s re-performing loan sale pilot drew a great response from investors. We are pleased to offer our first sale of 2017 and expect a similar high level of investor interest,” Ives said. “We look forward to offering these pools as we continue to focus on reducing the size of our retained mortgage portfolio.”

According to Fannie Mae, this sale of re-performing loans is being marketed with Citigroup Global Markets. Bids are due on April 5, 2017.

Reprints

Services Guide

Comments powered by Disqus