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Fannie Mae selling $2.43 billion in re-performing loans to Goldman Sachs subsidiary

MTGLQ Investors buying nearly 11,000 loans from GSE

Fannie Mae just announced the results of its fourth re-performing loan sale, and the winning bidder is a familiar name – MTGLQ Investors.

MTGLQ Investors is a “significant subsidiary” of Goldman Sachs, and over the last few years, Goldman Sachs has used MTGLQ Investors to buy up loans from both of the government-sponsored enterprises by the truckload.

In this latest sale, Fannie Mae is selling more than $2.43 billion in re-performing loans to MTGLQ Investors.

Fannie Mae initially announced the sale last month, originally stating that the sale would include a pool of about 11,000 loans totaling nearly $2.5 billion in unpaid principal balance.

The final sale was slightly smaller, with MTGLQ Investors buying 10,683 loans totaling $2.43 billion in UPB.

Each of the loans sold in this deal are re-performing, meaning they 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.

The terms of Fannie Mae’s re-performing loan sales require the buyer to offer loss mitigation options designed to be sustainable to any borrower who may re-default within five years following the sale. In addition, the loan buyers must report on loss mitigation outcomes. 

This sale was conducted in three pools, and MTGLQ Investors was the winning bidder for each pool.

Pool #1 included 4,200 loans with an aggregate unpaid principal balance of $984,619,405. The pool’s average loan size was $234,433, with a weighted average note rate of 4.54%. The loans in Pool #1 carry a weighted average broker's price opinion loan-to-value ratio of 109.61%.

Pool #2 included 2,001 loans with an aggregate unpaid principal balance of $461,732,787. The pool’s average loan size was $230,751, with a weighted average note rate of 4.36%. The loans in Pool #2 carry a weighted average BPO loan-to-value ratio of 97.54%.

Pool #3 included 4,482 loans with an aggregate unpaid principal balance of $988,847,948. The pool’s average loan size was $220,626, with a weighted average note rate of 4.35%, and a weighted average BPO loan-to-value ratio of 89.37%.

According to Fannie Mae, the cover bid price (the second highest bid) for the three pools was 91.51% of UPB and 83.37% of BPO, meaning that MTGLQ Investors’ bid exceeded those amounts.

The loan sale is expected to Oct. 26, 2017.

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