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Fannie Mae Sells More Delinquent Loans to Non-Profit

Fannie Mae BHGovernment agencies have have taken a lot of heat from advocacy groups, civil rights groups, and lawmakers in the last few months over selling non-performing residential mortgage loans (NPLs) to private investors and Wall Street rather than non-profits or other community development organizations.

On Thursday, however, Fannie Mae [1] announced it has sold its third Community Impact Pool of NPLs [2]to New Jersey Community Capital (NJCC) [3], a non-profit Community Development Financial Institution (CDFI) that the was winner of Fannie Mae’s first two Community Impact Pool auctions.

Fannie Mae’s sales of Community Impact Pools of NPLs are structured to attract participation from non-profits, smaller investors, and women- and minority-owned businesses.

“We continue to seek buyers for our non-performing loans that will take actionable steps to help struggling homeowners avoid foreclosure and help stabilize neighborhoods,” said Joy Cianci, SVP, Single-Family Credit Portfolio Management, Fannie Mae. “We actively work with non-profit organizations across the country to address the needs of borrowers in hard hit communities, and we are happy to award our Community Impact Pool to NJCC.”

The Community Impact Pool just sold contains 83 loans on properties in the Miami, Florida, area with an aggregate unpaid principal balance of approximately $19.7 million. The transaction is expected to close on July 25, 2016. Fannie Mae began marketing the Community Impact Pool to potential bidders (in collaboration with Bank of America Merrill Lynch and First Financial Network) on April 12.

The loans in the Community Impact Pool were delinquent by an average of 51 months, the average loan size was $237,672, the average note rate was 5.07 percent, and the average BPO LTV ratio was 105 percent. The sale price was in the high 60s as a percentage of UPB, according to Fannie Mae.

At the same time Fannie Mae announced the winners of the latest NPL sale, the GSE also announced the sale of an additional pool of NPLs in conjunction with its fifth NPL sale [4]. The winning bidder in this pool was Goldman Sachs, and the pool includes 1,760 loans with an aggregate unpaid principal balance of $329,788,631, an average loan size of $187,380, an average note rate of 5.41 percent, average delinquency of 49 months, and an average BPO LTV ratio of 83 percent.