On Thursday, Fannie Mae [1] began marketing its fourth sale of reperforming loans, as part of the GSE’s effort to reduce the volume of its retained mortgage portfolio. Fannie Mae is marketing a pool of approximately 11,000 loans, approximately $2.5 billion in unpaid principal balance, which is available for purchase by qualified bidders. This sale of reperforming loans is being marketed in collaboration with Citigroup Global Markets, Inc.
The Enterprise’s previous reperforming loan sale, which was announced on May 10 and ended on July 21, included the sale of approximately 13,500 loans totaling $2.99 billion in unpaid principal balance (UPB). The sale was divided into three different pools, all three of which were won by DLJ Mortgage Capital, Inc. (Credit Suisse). These pools were also marketed in collaboration with Citigroup Global Markets, Inc.
Fannie Mae’s third sale of reperforming loans consisted of multiple pools. Pool 1 consisted 5,179 loans with an aggregate unpaid principal balance of $1,147,189,914, an average loan size $221,508, a weighted average note rate 4.45 percent and a weighted average broker's price opinion (BPO) loan-to-value ratio of 94.90 percent. Pool 2 consisted of 5,096 loans with an aggregate unpaid principal balance of $1,120,135,737 an average loan size $219,806.86, a weighted average note rate 4.43 percent and a weighted average BPO loan-to-value ratio of 112.65 percent. Pool 3 consisted of 3,254 loans with an aggregate unpaid principal balance of $731,116,035, an average loan size $224,682.25, a weighted average note rate 3.86 percent, and a weighted average BPO loan-to-value ratio of 93.19 percent.
Reperforming loans are defined as mortgages that are no longer in delinquency because payments on the mortgages have become current, with or without loan modification. The GSE’s reperforming loan sales 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. Bids for Fannie Mae’s fourth reperforming loan sales are due on September 6. For more information, click here [2].