Fannie Mae looking to offload nearly $2 billion in re-performing loans

Loans currently being serviced by JPMorgan Chase

Fannie Mae is currently looking for a buyer (or buyers) to take nearly $2 billion in re-performing loans off its hands.

The government-sponsored enterprise announced Tuesday that it is selling 9,400 re-performing loans that carry an unpaid principal balance of approximately $1.972 billion.

The re-performing loan sale is the GSE’s sixth such sale. Last year, Fannie sold $2.11 billion in re-performing loans to DLJ Mortgage Capital, or Credit Suisse, in its fifth re-performing loan sale.

Re-performing loans are mortgages that were once delinquent, but are now performing again because payments on the mortgages have become current with or without the use of a loan modification.

According to Fannie Mae, this latest sale consists of two pools of loans: Pool 1 contains approximately $692.46 million in unpaid principal balance and Pool 2 carries approximately $1.279.61 billion in UPB.

The loans in both pools are currently being serviced by JPMorgan Chase.

The terms of Fannie Mae’s re-performing loan sales require the winning bidder to offer loss mitigation options that are designed to be sustainable to any borrower who may re-default within five years following the close of the loan sale.

Additionally, buyers must report back to Fannie Mae on loss mitigation outcomes, although, any reporting requirements end once a loan has been current for 12 consecutive months after the closing of the loan sale.

Bids on these loans are due on April 4, 2018, the GSE said.

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