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Fannie Mae unveils $1.49 billion reperforming loan sale

The offering is part of the agency’s efforts to reduce its book of retained loans

Fannie Mae is marketing its 25th sale of reperforming loans since its first offering six years ago and its second sale so far in 2022. The offering is comprised of 7,600 mortgages with total unpaid principal balance of $1.49 billion. 

The sale of reperforming loans (RPLs) is being marketed in collaboration with Citigroup Global Markets, with bids due by May 3, 2022. The offering is part of Fannie’s ongoing efforts to reduce the size of its retained mortgage portfolio, the agency said.

“All purchasers are required to honor any approved or in-process loss mitigation efforts at the time of sale, including forbearance arrangements and loan modifications,” Fannie’s announcement of the reperforming loan sale states. “In addition, purchasers must offer delinquent borrowers a waterfall of loss mitigation options, including loan modifications, which may include principal forgiveness, prior to initiating foreclosure on any loan.”

The transaction involves three loan pools — with pool 1 composed of loans with about $603.5 million in unpaid principal balance; pool 2 is at $514.5 million; and pool 3, $367.4 million. 

“Loans in Pools 1 thru 3 are being serviced by Wells Fargo or Chase,” Fannie’s fact sheet on the deal states. The sale is slated to close by mid-June 2022, after due-diligence period.

Fannie Mae initial sale of reperforming loans this year, announced in early February, involved an offering of more than 8,000 mortgages with an aggregate unpaid principal balance of $1.3 billion — also divided into three loan pools. 

“The winning bidders of the three pools for the transaction were Pacific Investment Management Company LLC (PIMCO) for Pools 1 and 2 and MCLP Asset Co. Inc. (Goldman Sachs) for Pool 3, each awarded individually,” Fannie states in an announcement about the results of the loan sale. “The transaction is expected to close on April 18, 2022.”

Reperforming loans are defined by Fannie Mae as mortgages that were previously delinquent but are performing again because payments have become current — with or without the use of a modification plan. Fannie Mae began selling reperforming loans in October 2016. 

On Thursday, GSE counterpart Freddie Mac announced the offering of a $1 billion securities issuance of reperforming loans through its SCRT program.  The underlying collateral consists of about 6,700 seasoned fixed-, step-, and adjustable-rate reperforming loans, and includes both loans that were modified to assist borrowers at risk of foreclosure and loans that were never modified. The loans are serviced by NewRez LLC, d/b/a Shellpoint Mortgage Servicing and Specialized Loan Servicing LLC.

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