On Tuesday, Fannie Mae announced its sixth sale of reperforming loans. Reperforming loans are mortgages that had become delinquent, but which have recovered thanks to borrowers either catching up on their payments or working to secure loan modifications.
This sixth sale of reperforming loans is comprised of approximately 9,400 loans, encompassing a total unpaid principal balance of around $1.97 billion. The sale is available only to qualified bidders, and bids are due by April 4, 2018. The sale is being marketed by Fannie in collaboration with Citigroup Global Markets, Inc.
Interested bidders should take note that there are some stipulations that accompany the sale, however. According to Fannie, buyers of the reperforming loans must “offer loss mitigation options designed to be sustainable to any borrower who may re-default within five years following the closing of the reperforming loan sale.” Buyers are also required to report any loss mitigation outcomes. Those requirements phase out “once a loan has been current for twelve consecutive months after the closing of the reperforming loan sale.”
Fannie previously offered its fifth sale of reperforming loans in October 2017. That offering included around 9,900 loans with a total unpaid principal balance of approximately $2.2 billion. The fourth such sale was announced in August, with 10,700 loans and an unpaid principal balance of $2.43 billion.
The sales of non-performing loans were enacted as a part of the Federal Housing Finance Agency’s 2015 Conservatorship Scorecard. Back in March of 2015, the Federal Housing Finance Agency (FHFA) announced guidelines for these sales to encourage broad buyer participation and provide safeguards for borrowers.
You can find more information about Fannie’s latest offering of reperforming loans, including details about the specific pools available, by clicking here.