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Fannie Mae’s First Community Impact NPL Pool Goes to New Jersey Non-Profit

money-twoFannie Mae announced Wednesday that non-profit New Jersey Community Capital (NJCC) is the winning bidder for the GSE's first-ever Community Impact Pool of deeply delinquent non-performing loans (NPLs).

The Community Impact Pool of NPLs was specifically structured to attract bidding by non-profits, small investors, and minority- and women-owned businesses (MWOBs). Fannie Mae marketed the Community Impact Pool at the same time as two larger pools consisting of approximately 3,900 NPLs, which sold in mid-August for a combined $765 million. The winning bidder in that transaction was Lone Star (LSF9 Mortgage Holdings, LLC).

The smaller Community Impact Pool consists of 75 high-occupancy and geographically focused loans in the Tampa, Florida, area with about $11 million in unpaid principal balance (UPB). The transaction is expected to close on October 26, 2015, according to Fannie Mae. The winning bidder, NJCC, is a nonprofit community development financial institution (CDFI) that transforms at-risk communities through strategic investments of capital and knowledge.

Fannie Mae NPL graph

"We’re proud to partner with New Jersey Community Capital to help neighborhoods stabilize and recover," said Joy Cianci, Fannie Mae’s SVP for Credit Portfolio Management. "This sale will reduce our holdings of non-performing loans while giving homeowners additional options to avoid foreclosure. We will continue to structure loan sales to foster participation of non-profits and small investors and we look forward to working closely with these groups."

Fannie Mae began marketing its second NPL sale, which included the Community Impact Pool, to potential bidders on July 16 in collaboration with Credit Suisse Securities, Wells Fargo Securities, and the Williams Capital Group. The cover bid price for the Community Impact Pool is 81.43 percent of UPB (67.13 percent of the broker's price opinion, or BPO). For the 75 loans, the average loan size was $143,572 and the average note rate was 5.43 percent. The loans were an average of approximately 39 months delinquent, and the average BPO loan-to-value was 82 percent.

"This sale will reduce our holdings of non-performing loans while giving homeowners additional options to avoid foreclosure."

"We are thrilled for the opportunity to continue to expand NJCC’s innovative foreclosure mitigation and prevention programs in Florida to help keep families in their homes and enable distressed communities to flourish," said Wayne T. Meyer of NJCC. "Through our loss mitigation programs, which utilize principal reduction as a key part of right sizing borrowers’ first mortgage debt, we have already helped over 200 homeowners in Florida and look forward to continuing this progress."

In May, Fannie Mae closed its first-ever bulk NPL sale. That transaction included approximately 3,000 deeply delinquent residential single-family mortgage loans totaling about $762 million in UPB.

Click here for more information on NPL sale guidelines and registration for ongoing announcements, training, and other information.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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