[1]Fannie Mae [2] announced the winning bidder [3] for its second-ever sale of deeply delinquent non-performing loans (NPLs) on Thursday, which included approximately 3,900 loans.
The two larger pools in the transaction totaled $765 million in unpaid principal balance (UPB), according to Fannie Mae. The winner of the two larger pools was Lone Star (LSF9 Mortgage Holdings) and the transaction is expected to close on September 25.
"The goal of non-performing loans sales is to be able to offer borrowers additional options to avoid foreclosure, while also reducing the number of seriously delinquent loans in Fannie Mae’s portfolio," said Joy Cianci, Fannie Mae’s SVP for Credit Portfolio Management. "Our goal is to market these loans to a diverse range of buyers, including non-profit organizations, smaller investors and minority- and women-owned businesses."
Fannie Mae began marketing this NPL transaction on July 16 [4] in collaboration with Credit Suisse Securities, Wells Fargo Securities, and the Williams Capital Group. The breakdown of the two larger pools is as follows:
Pool #1
- 831 loans
- Aggregate UPB of $175.5 million
- Average loan size of $211,179
- Average note rate of 5.00%
- Average delinquency 37 months
- Average BPO LTV of 137%
Pool #2
- 3,034 loans
- Aggregate UPB of $589.5 million
- Average loan size of $194,298
- Average note rate of 5.27%
- Average delinquency 37 months
- Average BPO LTV of 68%
In addition to the two larger pools, this NPL sale by Fannie Mae includes a smaller Community Impact Pool consisting of about 75 loans totaling $11 million in UPB. The Community Impact Pool is a geographically focused, high occupancy pool that is being marketed to encourage minority- and women-owned businesses (MWOBs) to participate. Bidders for the Community Impact Pool have additional time to participate in order to be as inclusive as possible; bids are due by August 25.
"The goal of non-performing loans sales is to be able to offer borrowers additional options to avoid foreclosure, while also reducing the number of seriously delinquent loans in Fannie Mae’s portfolio." —Joy Cianci, Fannie Mae’s SVP for Credit Portfolio Management.
In May, Fannie Mae closed its first-ever bulk NPL sale [5]. That transaction included approximately 3,000 deeply delinquent residential single-family mortgage loans totaling about $762 million in UPB. Freddie Mac recently announced its sixth NPL transaction of 2015 (with $1.2 billion in UPB) and seventh overall since July 2014. Freddie Mae's previous NPL sales have totaled approximately $2.76 billion in UPB. The last one, which was completed on July 28 [6], was comprised of 3,577 deeply delinquent loans with $591 million in UPB.