DSNews The homepage of the servicing industry
Fannie Mae has announced its latest sale of non-performing loans (NPLs) as part of the company's ongoing effort to reduce the size of its retained mortgage portfolio, including the company's 22nd Community Impact Pool (CIP). CIPs are typically smaller pools of loans that are geographically focused and marketed to encourage participation by non-profit organizations, minority- and women-owned businesses (MWOBs), and smaller investors.
The one large pool includes approximately 1,555 loans totaling $217.5 million in unpaid principal balance (UPB), and the CIP includes approximately 60 loans totaling $18.6 million in UPB. The CIP consists of loans geographically located in the New York area. All pools are available for purchase by qualified bidders. This sale of non-performing loans is being marketed in collaboration with BofA Securities, Inc. and First Financial Network, Inc., a woman-owned and -controlled business, as advisors.
Bids are due on the one large pool by October 31, 2023, and on the CIP by November 16, 2023.
Terms of Fannie Mae's non-performing loan transactions require the buyer of the non-performing loans to offer loss mitigation options designed to be sustainable for borrowers. All buyers of non-performing loans are required to honor any approved or in-process loss mitigation efforts at the time of closing, including forbearance arrangements and loan modifications. In addition, non-performing loan buyers must offer delinquent borrowers a waterfall of loss mitigation options, including loan modifications, which may include principal forgiveness, prior to initiating foreclosure on any loan, not secured by property which is vacant or condemned at the time of closing. In the event a foreclosure cannot be prevented, the owner of the loan must market the property to owner-occupants and non-profits before offering it to investors, similar to Fannie Mae's FirstLook program.
In late September, Fannie Mae executed its eighth Credit Insurance Risk Transfer (CIRT) transaction of 2023, CIRT 2023-8, which transferred $344.3 million of mortgage credit risk to private insurers and reinsurers. CIRT transactions transfer credit risk on a pool of loans to an insurance provider, which may then transfer that risk to one or more reinsurers, complementing Fannie Mae's other current risk transfer offerings that leverage the capital markets.
The covered loan pool for CIRT 2023-8 consists of approximately 27,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $8.4 billion. The covered pool includes collateral with loan-to-value (LTV) ratios of 60.01% to 80% acquired between September 2022 and December 2022. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls.
Fannie Mae also recently announced a partnership with Pulsenomics LLC, an independent research and consulting firm, to produce the quarterly Home Price Expectations Survey (HPES). The HPES will survey more than 100 housing experts across the industry and academia for forecasts of national home price percentage changes in each of the coming five calendar years. On a quarterly basis, Fannie Mae will publish the survey results, including respondent feedback on topical questions designed to help inform the broader housing industry.
