Fannie Mae began marketing its fourth sale of re-performing loans Thursday as it seeks to reduce the size of its retained mortgage portfolio.
Back in April, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will be reducing the principal on as many as 33,000 delinquent or underwater borrowers. Less than two weeks later, Fannie Mae announced that it planned to begin securitizing once-delinquent loans.
Now, the GSE is preparing to pass off a pool of about 11,000 loans totaling near $2.5 billion in unpaid principle balance. The pool is now available for purchase by qualified bidders.
Fannie Mae is marketing this sale of re-performing loans in collaboration with Citigroup Global Markets. Bids are due on September 6, 2017.
Re-performing loans are mortgages that were previously delinquent, but are performing again because payments on the mortgages have become current with or without the use of a loan modification.
As always, the terms of Fannie Mae's re-performing loan sale require the buyer 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. In addition, buyers must 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.