For about a decade GSE Fannie Mae has been carrying delinquent mortgages that have started performing again (that is, payments on the mortgages have become current with or without the assistance of modification of loan terms). Fannie Mae packages and markets the reperforming loans to investors, usually through a money center bank.
Fannie Mae last week began marketing its seventeenth sale of reperforming loans, the GSE said in a news release, "as part of the company's ongoing effort to reduce the size of its retained mortgage portfolio."
The sale consists of approximately 19,800 loans, having an unpaid principal balance of approximately $2.8 billion, and is available for purchase by qualified bidders. Interested bidders can register on the Whole Loans Sales page [1].
This sale of reperforming loans is being marketed in collaboration with Citigroup Global Markets, Inc. Bids are due October 6.
Some of the reperforming loans may be up to 90 days delinquent. 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 closing of the reperforming loan sale.
In addition, buyers must report on loss mitigation outcomes. Any reporting requirements cease once a loan has been current for twelve consecutive months after the closing of the reperforming loan sale.
Interested bidders can register here [1] for ongoing announcements, training, and other information. Fannie Mae will also post information about specific pools available for purchase on that page.
Results from the 16th sale of such loans are reported here [2].