While HUD recently proposed changes to its distressed loan sale program allowing a "preferential bidding" option to involve more non-profits, Fannie Mae still sells its non-performing loans to the highest bidder.
Fannie Mae announced the winning bidders for its sixth non-performing loan sale which includes approximately 9,300 loans totaling in $1.5 billion of unpaid principal balance to be divided among six pools, according to an announcement from the GSE.
The winning bidders for the transaction are LSF9 Mortgage Holdings, LLC (Lone Star) and PRMF Acquisition LLC (Neuberger Berman), with three pools going to each bidder. These transactions are expected to close on August 24.
Fannie Mae began marketing these loans to potential bidders on June 16, 2016 collaborating with both Bank of America Merrill Lynch and CastleOak Securities, L.P.. Also part of the offering, bids are expected separately on Fannie Mae’s fourth Community Impact Pool on July 21, 2016.
The Federal Housing Finance Agency announced on April 14, 2016, changes to its requirements for sales of non-performing loans by Fannie Mae as well as Freddie Mac that add to the requirements originally announced in March 2015. These requirements, which apply to this particular Fannie Mae non-performing loan sale, encourage sustainable modifications which have the potential to provide additional borrowers the opportunity for home retention.
The loan pools awarded in this most recent transaction are divided into two groups. Group 1 Pools include 4,537 loans with an aggregate unpaid principal balance of $746,438,433, an average loan size at $162,964, a weighted average note rate sitting at 4.51 percent, a weighted average delinquency of 34 months, and a weighted average broker's price opinion loan-to-value ratio of 67 percent.
Likewise, the Group 2 Pools includes 4,721 loans with an aggregate unpaid principal balance of $759,860,824, an average loan size of $160,148, a weighted average note rate at 5.24 percent, weighted average delinquency at 27 months, and a weighted average broker's price opinion loan-to-value ratio of 82 percent.
According to the announcement, the cover bid price for Group 1 is 78.2 percent of UPB (52.2 percent BPO) and is 71.0 percent UPB (58.0 percent BPO) for Group 2.