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HUD selling $2.3 billion non-performing loans

Sixth sale since September 2012

The U.S. Department of Housing and Urban Development is at it again. For the sixth time in less than two years, HUD is preparing to sell a massive portfolio of non-performing mortgage loans, according to DebtX, which is acting as the loan sale advisor.

The loan sale, titled HUD SFLS 2014-2 Part 2, includes roughly 15,000 non-performing single-family mortgage loans with a total unpaid principal balance of $2.3 billion.

According to DebtX, the loans will be sold in eight national pools, with the pools ranging in size from $94.5 million to $804.5 million.

The pools will bid on September 30.

HUD previously sold $4.8 billion in non-performing loans in June as part one of its SFLS 2014-2. That sale itself consisted of two parts.

The first part of the sale was a national offering of approximately 23,200 loans totaling $4 billion in unpaid principal balance. It was offered in 16 pools, ranging in size from $93 million to $1 billion. The loans were collateralized by properties across the U.S., with one pool concentrated in the Southwest. 

The second part of the sale came from a HUD Neighborhood Stabilization Outcomes pool and consisted of approximately 4,800 loans totaling $800 million in unpaid principal balance. The NSO offering comes from eight NSO regions: Philadelphia, Miami, Chicago, Detroit, San Antonio, Atlanta, San Bernardino County, California and Cumberland County, New Jersey.

Lone Star Funds purchased the larger of the two pools in totality, which marked the first time in the history of the Distressed Asset Stabilization Program that a single bidder submitted the highest bid on “each and every pool,” HUD said at the time.

HUD said that there were 68 qualified bidders for that sale and that Lone Star Funds secured all of the pools with a weighted average bid of 77.6% of the collateral value.

“The sale was the most competitive sale to date, drawing a larger number of bidders and bids per pool than previous sales,” HUD said in a statement in June.

HUD states that entities that qualified for the June sale, SFLS 2014-2 Part 1, are approved to bid on the new sale and do not need to resubmit qualification documents.

DebtX said that the new sale will mark the sixth mutli-billion dollar sale of non-performing loans it has handled for HUD since September 2012. DebtX reports that in those previous sales, HUD has offered more than 100,000 residential loans for sale. 

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