Fannie Mae sells the first pools of re-performing loans

Began marketing less than a month ago

Fannie Mae today announced the sale of the very first pools of its re-performing loans, which it began marketing early last month.

The company announced it would begin securitizing these loans earlier this year after the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac would be reducing the principal on loans held by as many as 33,000 delinquent or underwater borrowers.

Re-performing loans are mortgages that were previously delinquent, but now are performing because payments on the mortgage became current. This can occur with or without the use of a loan modification plan.

The sale included about 3,500 loans totaling $789.2 million in unpaid principal balance, which was divided into two pools. Towd Point Master Funding won both pools, and the transaction is expected to close on Dec. 15, 2016.

Fannie Mae marketed these pools in collaboration with Citigroup Global Markets.

“We are pleased to see a high level of investor interest in our re-performing loans,” said Bob Ives, Fannie Mae vice president of retained portfolio asset management. “This sale supports our efforts to reduce the size of the company’s balance sheet.”

The number of loans in the sale totaled 3,508 loans with an aggregate unpaid principal balance of $789,212,882. Other characteristics:

  • Average loan size of $224,975
  • Weighted average note rate of 4.07%
  • Weighted average broker's price opinion loan-to-value ratio of 104%

The cover bid price for the two pools is 88.15% of unpaid principal balance.

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