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Fannie announced its latest sale of non-performing loans to reduce the size of its retained mortgage portfolio.
KEY TAKEAWAYS
- Fannie announced its latest sale of non-performing loans to reduce the size of its retained mortgage portfolio, including the company’s eighteenth Community Impact Pool (CIP).
- The four larger pools include 11,400 loans totaling $1.7 billion in unpaid principal balance (UPB), while the CIP contains about 140 loans totaling $45.2 million in UPB.
- Bids for the four larger pools are due on October 5, 2021, and the CIP on October 19, 2021.
As part of Fannie Mae’s effort to reduce the size of its retained mortgage portfolio, including the company’s eighteenth Community Impact Pool (CIP), Fannie announced its latest sale of non-performing loans. CIPs are smaller pools of loans that are geographically focused and marketed to encourage participation from non-profit organizations, as well as women and minority owned businesses (MWOBs) and small investors.
The four larger pools include 11,400 loans totaling $1.7 billion in unpaid principal balance (UPB), while the CIP contains about 140 loans totaling $45.2 million in UPB. The loans are geographically located in New York, and all loans are available for purchase by qualified bidders. The sale of these non-performing loans is being marketed in collaboration with BofA Securities, Inc. and First Financial Network.
The terms of Fannie Mae’s non-performing loan transaction requires the buyer to pursue loss mitigation options to ensure sustainability for borrowers. Purchasers are also required to honor any approved or in-process loss mitigation efforts, including forbearance and loan modification, at the time of sale.
Additionally, purchasers must offer delinquent borrowers a multitude of loss mitigation options, including loan modifications or loan forgiveness, prior to initiating foreclosure. In the event of inevitable foreclosure, the owner of the loan must market the property to owner-occupants and non-profits before reaching out to investors. This is similar to Fannie Mae’s First Look Program.
Bids for the four larger pools are due on October 5, 2021, and on the CIP on October 19, 2021. Fannie Mae will also post more information about specific pools available for purchase on their website.
