Fannie Mae announced Wednesday the latest sale of non-performing loans and its third reperforming loans sale.
The sale of Fannie Mae’s latest non-performing loans includes its seventh and eighth Community Impact Pools. These are smaller pools of loans which are geographically focused, high occupancy and marketed to encourage participation by non-profit organizations, minority- and women-owned businesses and small investors.
The three larger pools hold about 3,600 loans that total $613 million in unpaid principal balance, while the Community Impact Pools make up about 135 loans from the New York and New Jersey areas. These smaller pools hold about $34.47 million in UPB, and are available for purchase by qualified bidders.
The sale for the non-performing loans is being marketed in collaboration with Wells Fargo Securities and The Williams Capital Group.
Bids are due on the three larger pools by June 1, and bids for the Community Impact Pools are due by June 14.
Among other elements, terms of Fannie Mae’s non-performing loan transactions require the buyer of the non-performing loans to pursue loss mitigation options that are sustainable for borrowers. In the event a foreclosure cannot be prevented, the owner of the loan must market the property to owner-occupants and non-profits exclusively before offering it to investors, similar to Fannie Mae’s FirstLook program.
And the company also began marketing its third reperforming loans sale Wednesday as part of its attempt to reduce the size of its retained mortgage portfolio.
Reperforming 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.
The reperforming loans pool holds about 13,700 loans totaling $3.036 billion in UPB. This pool is being marketed in collaboration with Citigroup Global Markets, and bids are due by June 5.
The terms of Fannie Mae’s reperforming 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 reperforming 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 reperforming loan sale.