How are delinquent residential single-family mortgage loans modified by Fannie Mae [1] performing after their modifications? The industry is about to find out.
Fannie Mae announced on Monday [2] it will release historical data on a portion of the loan modifications the Agency completed on delinquent loans. The purpose of publishing this data is to give the industry a greater ability to analyze the performance of loans that were modified in support of the Agency’s reperforming loan (RPL) securitization program [3] that was announced in April, according to Fannie Mae.
“The market for Agency RPL securities is relatively new, and we are providing this information so that the industry can get an in-depth view of the underlying loan performance,” said Bob Ives, Head of Retained Portfolio Asset Management, Fannie Mae. “This historical data release should allow for a greater understanding of these loans and enable better modeling which in turn should foster greater liquidity for these securities.”
The historical data on about 700,000 Fannie Mae-backed loans modified between 2010 and 2015 will be made available in July and will be available for about six months, according to Fannie Mae.
Fannie Mae announced on April 25 [3] that it would begin its securitizing reperforming loans, which are currently performing mortgage loans that were previously delinquent but were restored to performing status either with or without the assistance of a loan modification plan.
Fannie Mae may sell the mortgage-backed securities to investors, thus reducing the size of its mortgage-related investments portfolio. The securitization of reperforming loans by Fannie Mae is designed to benefit all parties involved, including taxpayers. Fannie Mae expects to begin securitizing the reperforming loans in the second half of 2016.
“With these securitizations we’ll have more flexibility to manage our risk and reduce the size of our portfolio,” said Ives said. “Over the long run, these securitizations can benefit investors, Fannie Mae, and taxpayers.”