[1]It is not yet midway through the week, and the GSEs have already had a busy week with their aggressive campaign to excise deeply delinquent, non-performing loans (NPLs) from their respective single-family residential mortgage investment portfolios.
Fannie Mae [2] announced the winners in its third NPL sale on Tuesday, and on Monday Freddie Mac [3] announced its eighth NPL transaction of 2015. Both transactions total approximately $1.2 billion in unpaid principal balance (UPB).
The Fannie Mae transaction totaled approximately 7,000 loans with about $1.24 billion in UPB, divided amongst three pools. Fannie Mae began marketing the loans to potential bidders on October 9 in collaboration with Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, J.P. Morgan Securities LLC and the Williams Capital Group L.P. The breakdown of the three pools is as follows:
- Pool #1 consists of 1,963 loans with an aggregate UPB of $418.8 million; the average loan size is $213,366, and the loans are delinquent an average of 52 months. The weighted average note rate is 5.21 percent and the weighted average Broker Price Opinion (BPO) LTV is 108 percent. The winning bidder on this pool was Fortress (New Residential Investment Corp.).
- Pool #2 consists of 3,823 loans with an aggregate UPB of $588.3 million with an average loan size $153,902. The weighted average note rate is 5.32 percent and the weighted average BPO LTV is 70 percent. The loans are delinquent an average of 34 months. The winning bidder on this pool was Goldman Sachs (MTGLQ Investors, L.P.).
- Pool #3 consists of 1,224 loans with an aggregate UPB of $235.3 million and an average loan size of $192,256. The loans have a weighted average note rate of 4.90 percent and a weighted average BPO LTV of 135 percent. The loans are an average of 34 months delinquent. The winning bidder for this pool was Fortress (New Residential Investment Corp.).
The three pools together included an average loan size of $177,251, a weighted average note rate of 5.20 percent, and a weighted average BPO LTV of 95 percent. The average delinquency of the loans in the three pools was 41 months. The transaction is expected to close on December 17.
“The non-performing loans included in this sale are severely delinquent and despite our ongoing efforts to offer loss mitigation on these loans, they remain non-performing,” said Joy Cianci, Fannie Mae’s SVP for Credit Portfolio Management. “We are offering non-performing loan sales to investors and their servicers who can help borrowers avoid foreclosure wherever possible by applying a wider range of loss mitigation options than we have available.”
Fannie Mae completed its first-ever bulk NPL transaction [4] in April. That sale included approximately 3,200 deeply delinquent residential mortgage loans totaling $786 million in UPB. In July, Fannie Mae completed its second NPL sale [5], which included about 3,000 NPLs totaling $777 million in UPB and a smaller community pool consisting of 75 loans totaling $11 million in UPB.
Meanwhile, Freddie Mac announced an NPL transaction which includes deeply delinquent loans serviced by Wells Fargo totaling $1.2 billion in UPB. It is Freddie Mac’s eighth NPL transaction of 2015. This bundle of NPLs is being marketed in seven pools: five geographically Standard Pool Offerings (SPOs) and two geographically concentrated Extended Timeline Pool Offerings (EXPOs), which target participation by non-profits, minority and women-owned businesses (MWOB), and smaller investors.
Bids are due from qualified bidders on the SPO offerings on December 2 and on the EXPO offerings on December 16, and the transactions are expected to settle sometime in the first quarter of 2016.
Freddie Mac’s previous NPL sales total approximately $4.26 billion in UPB.
For more information on Fannie Mae’s NPL sales, click here [6].
For more information on Freddie Mac’s NPL sales, click here [7].