Servicing

Fannie Mae sells $2 billion in re-performing loans to Fortress, private equity firm

Deal announced March 13, 2018

Fannie Mae is selling nearly $2 billion in re-performing loans to a fund controlled by global investment giant Fortress Investment Group, and another private equity firm, the government-sponsored enterprise announced Wednesday.

Fannie Mae originally announced the sale in March. The re-performing loan sale is the GSEs’ 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.

In this sale, the loans were sold in two different pools.

The first pool, which carries a total unpaid principal balance of $686.4 million, is being bought by NRZ Mortgage Holdings, a fund controlled by Fortress.

Fortress is the parent company for New Residential Investment, which buys up mortgage servicing rights by the truckload. Fortress was bought late last year by Japan’s SoftBank Group for $3.3 billion.

According to Fannie Mae, the pool bought by NRZ Mortgage Holdings consists of 3,015 loans with an average loan size of  $227,659; a weighted average note rate of 4.04%; and a weighted average broker’s price opinion loan-to-value ratio of 75%.

The larger pool, which consists of 6,363 loans with an aggregate unpaid principal balance of $1.27 billion, is being sold to Towd Point Master Funding.

The loans in that pool carry an average loan size $200,071; a weighted average note rate of 3.12%; and a weighted average BPO loan-to-value ratio of 87%.

This isn’t the first time that Towd Point Master Funding has bought loans from a GSE.

Last year, Towd Point bought approximately $292 million in previously modified loans from Freddie Mac.

According to Fannie Mae, this latest loan sale is expected to close on May 24, 2018.

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