Fannie Mae Announces the Results of its Thirty-first Reperforming Loan Sale Transaction

Rhea-AI Summary

On May 16, 2024, Fannie Mae (OTCQB: FNMA) announced the results of its thirty-first reperforming loan sale transaction. The sale, initially announced on April 16, 2024, comprised 6,484 loans totaling $1.47 billion in unpaid principal balance (UPB), divided into three pools. Pacific Investment Management Company (PIMCO) won bids for all three pools, and the transaction is set to close by June 25, 2024. Pool 1 included 2,959 loans worth $667.2 million UPB, Pool 2 had 2,197 loans worth $498.6 million UPB, and Pool 3 comprised 1,328 loans worth $299.5 million UPB. The cover bids were approximately 78.5% of UPB across all pools. Buyers must offer loss mitigation options for re-defaulting loans within five years.

Positive

• Successful sale of 6,484 loans totaling $1.47 billion in unpaid principal balance.
• Pacific Investment Management Company (PIMCO) as the winning bidder for all pools.
• Transaction scheduled to close by June 25, 2024.
• Pools marketed with the advisory of Citigroup Global Markets.

Negative

• Reperforming loans indicate previous delinquencies, implying a higher risk profile.
• Requirement for buyers to offer loss mitigation options for potential re-defaults within five years, possibly increasing operational costs for buyers.

WASHINGTON, May 16, 2024 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) today announced the results of its thirty-first reperforming loan sale transaction. The deal, announced on April 16, 2024, included the sale of 6,484 loans totaling $1.47 billion in unpaid principal balance (UPB), offered in three pools. The winning bidder was Pacific Investment Management Company LLC (PIMCO) for Pools 1, 2 and 3, each awarded individually. The transaction is expected to close by June 25, 2024. The pool was marketed with Citigroup Global Markets Inc. as advisor.

The loan pool awarded in this most recent transaction includes:

• Pool 1: 2,959 loans with an aggregate UPB of $667,197,001; average loan size of $225,481 weighted average note rate of 3.204%; and weighted average broker's price opinion (BPO) loan-to-value ratio of 48%.
• Pool 2: 2,197 loans with an aggregate UPB of $498,589,899; average loan size of $226,941 weighted average note rate of 3.208%; and weighted average broker's price opinion (BPO) loan-to-value ratio of 49%.
• Pool 3: 1,328 loans with an aggregate UPB of $299,535,261; average loan size of $225,554 weighted average note rate of 3.201%; and weighted average broker's price opinion (BPO) loan-to-value ratio of 49%.

The cover bid, which is the second highest bid for the pool, was 78.554% of UPB (32.30% of BPO) for Pool 1, 78.640% of UPB (32.70% of BPO) for Pool 2 and 78.870% of UPB (32.72% of BPO) for Pool 3.

Reperforming loans are loans that have been or are currently delinquent but have reperformed for a period of time. The terms of Fannie Mae's reperforming loan sale require the buyer to offer loss mitigation options to any borrower who may re-default within five years following the closing of the reperforming loan sale. All purchasers are required to honor any approved or in-process loss mitigation efforts at the time of sale, including forbearance arrangements and loan modifications. In addition, purchasers must offer delinquent borrowers a waterfall of loss mitigation options, including loan modifications, which may include principal forgiveness or payment deferral prior to initiating foreclosure on any loan.

Interested bidders can register for ongoing announcements, training, and other information here. Fannie Mae will also post information about specific pools available for purchase on that page.

About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
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SOURCE Fannie Mae

FAQ

What is the total value of the loans in Fannie Mae's thirty-first reperforming loan sale?

The total value of the loans is $1.47 billion in unpaid principal balance (UPB).

Who was the winning bidder for Fannie Mae's reperforming loan sale?

Pacific Investment Management Company (PIMCO) won the bids for all three pools.

When is the transaction for Fannie Mae's reperforming loan sale expected to close?

The transaction is expected to close by June 25, 2024.

What is the size and loan-to-value ratio of Pool 1 in Fannie Mae's reperforming loan sale?

Pool 1 includes 2,959 loans with an aggregate UPB of $667.2 million and a weighted average broker's price opinion (BPO) loan-to-value ratio of 48%.

What are the terms regarding loss mitigation for Fannie Mae's reperforming loan sale?

Buyers must offer loss mitigation options to re-defaulting loans within five years after the sale, including forbearance arrangements and loan modifications.