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Fannie Mae finds familiar buyer for second non-performing loan sale

Lone Star buys more deeply delinquent loans

Fannie Mae announced the winning bidder in its second sale of non-performing loans – and the purchaser is a name that’s becoming commonplace in deals of this type.

According to an announcement from Fannie Mae, Lone Star Funds, or more specifically the private-equity's trust LSF9 Mortgage Holdings, is the winning bidder for Fannie Mae’s second sale of non-performing loans.

LSF9 Mortgage Holdings was also the winning bidder in a deeply delinquent loan sale earlier this year from Freddie Mac. In that sale, LSF9 Mortgage Holdings purchased 1,052 deeply delinquent Ocwen-serviced non-performing loans that carried an aggregate unpaid principal balance of $201 million.

The latest purchase for LSF9 Mortgage Holdings included two pools from Fannie Mae that included approximately 3,900 loans totaling $765 million in unpaid principal balance.

LSF9 Mortgage Holdings was the winning bidder for both pools, Fannie said.

Pool 1 contained 831 loans with an aggregate unpaid principal balance of $175,489,876. The loans carried an average loan size of $211,179 and an average note rate of 5%.

The loans in Pool were more than three years delinquent on average and carried an average broker price opinion loan-to-value ratio of 137%.

Pool 2 contained 3,034 loans with an aggregate unpaid principal balance of $589,499,256 and an average loan size of $194,298. The loans carry an average note rate of 5.27% and are also more than three years delinquent on average.

But these loans carry a much lower average broker price opinion loan-to-value ratio than Pool 1 – 68%.

The average loan size and average note rate on the aggregate of the two pools were $197,927 and 5.20%, respectively. The average delinquency of for both pools of loans was approximately 37 months with an average BPO LTV of 76%.

The cover bid price for Pool #1 is 51.04% of UPB (69.67% BPO) and for Pool #2 is 86.28% of UPB (58.20% BPO). 

“The goal of non-performing loans sales is to be able to offer borrowers additional options to avoid foreclosure, while also reducing the number of seriously delinquent loans in Fannie Mae’s portfolio,” said Joy Cianci, Fannie Mae’s senior vice president for credit portfolio management. “Our goal is to market these loans to a diverse range of buyers, including non-profit organizations, smaller investors and minority- and women-owned businesses.”

This sale of NPLs was marketed in collaboration with Credit Suisse Securities, Wells Fargo Securities and the Williams Capital Group.

This second NPL sale for Fannie Mae also included a smaller “Community Impact Pool,” a geographically focused, high occupancy pool being marketed to encourage participation by non-profits and minority- and women-owned businesses, Fannie said.

Fannie said that in order to be as inclusive as possible, bidders on the Community Impact Pool have been given additional time to participate.

The Community Impact Pool consists of approximately 75 loans, focused in the Tampa, Florida-area, totaling $11 million.

Bids are now due by Aug. 25, 2015.

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