Investments

$4.8 billion of non-performing HUD loans set to hit the market

Fifth deal offered in the last 18 months

Loan sale advisor DebtX is set to offer a sale of $4.8 billion in non-performing loans for the U.S. Department of Housing and Urban Development in June. This will be the fifth non-performing HUD offering from DebtX and SEBA Professional Services in the last 18 months.

The loan sale, titled HUD SFLS 2014-2, consists of two parts. The first part of the sale is a national offering of approximately 23,200 loans totaling $4 billion in unpaid principal balance. It will be offered in 16 pools, ranging from $93 million to $1 billion. The loans are collateralized by properties across the U.S., with one pool concentrated in the Southwest. 

The second part of the sale comes from a Neighborhood Stabilization Outcomes pool and consists of approximately 4,800 loans totaling $800 million in UPB. The NSO offering comes from eight NSO regions: Philadelphia, Miami, Chicago, Detroit, San Antonio, Atlanta, San Bernardino County, Calif. and Cumberland County, N.J.

The national part of the sale will bill on June 11 and the NSO pool will bid on June 25.

“We are pleased to support HUD on its fifth, multi-billion dollar sale of single family loans in the past 18 months,” said Erhiuvie Abu, president and CEO, SEBA Professional Services, LLC.

Since September 2012, SEBA and DebtX have offered more than 72,000 non-performing, single-family loans for HUD. Just over a year ago, HUD said that it would sell 40,000 non-performing loans in 2013. 

“HUD has taken a clear leadership position in the market, systematically managing its risk through the sale of $17 billion of non-performing single family loans since late 2012,” said DebtX CEO Kingsley Greenland. “Once again, we expect strong investor interest and bidding as we reach the 100,000-loan milestone with HUD.”

In October, DebtX and SEBA oversaw a similar, but slightly larger sale of non-performing loans for HUD. That sale was for $5 billion.

A source at the FHA tells HousingWire that this won't be the last non-peforming loan offering from HUD. With the Federal Housing Administration playing an “outsized role” in the mortgage market, according to HUD Secretary Shaun Donovan, that probably won't come as a surprise. 

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