Investments Lending Servicing

Fannie Mae sells $1.62 billion in re-performing loans to Credit Suisse subsidiary

Closes sale of 7,500 loans to DLJ Mortgage Capital

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Fannie Mae announced Thursday that it completed its second sale of re-performing loans, selling more than $1.6 billion in re-performing loans to a subsidiary of Credit Suisse.

According to Fannie Mae, it is selling approximately 7,500 re-performing loans with a total unpaid principal balance of $1.62 billion to DLJ Mortgage Capital, a subsidiary of Credit Suisse.

DLJ Mortgage Capital also recently purchased $4.9 billion in mortgages from HSBC Finance Corp. and HSBC Bank, as part of HSBC’s reduction of its U.S. mortgage business, which began back in 2008.

In this sale from Fannie Mae, DLJ Mortgage Capital was the winning bidder on all four pools of re-performing loans, which Fannie Mae classifies as 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, this sale includes 7,508 loans with an aggregate unpaid principal balance of $1,620,289,531. The sale was initially announced last month.

The average loan size in the pool is $215,808.41. The pool’s weighted average note rate is 4.10%, while the pool’s weighted average broker's price opinion loan-to-value ratio is 103.60%.

This is Fannie Mae’s second 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.

As part of the terms of the sale, the buyer in a re-performing loan sale is required 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 also 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.

According to Fannie Mae, the sale was marketed with Citigroup Global Markets as advisor.

Fannie Mae also said that the deal is expected to close on May 25, 2017.

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