Fannie Mae Announces the Results of its Twenty-fifth Reperforming Loan Sale Transaction

Rhea-AI Summary

Fannie Mae (OTCQB: FNMA) announced the results of its twenty-fifth reperforming loan sale transaction on May 10, 2022. The sale involved approximately 7,500 loans totaling $1.47 billion in unpaid principal balance, divided into three pools. Winning bidders were PIMCO for Pools 1 and 2, and Goldman Sachs for Pool 3. The transaction is scheduled to close on June 17, 2022. Reperforming loans, which may have been delinquent but are now performing, require buyers to offer loss mitigation options to borrowers within five years of the sale.

Positive

• Successful sale of 7,500 loans valued at $1.47 billion.
• Strong bidder interest from reputable firms like PIMCO and Goldman Sachs.
• Mandates for loss mitigation options to borrowers enhance consumer protection.

Negative

• The loans involved have a history of delinquency, indicating potential future risks.

WASHINGTON, May 10, 2022 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) today announced the results of its twenty-fifth reperforming loan sale transaction. The deal, announced on April 7, 2022, included the sale of approximately 7,500 loans totaling $1.47 billion in unpaid principal balance (UPB), divided into three pools. The winning bidders of the three pools for the transaction were Pacific Investment Management Company LLC (PIMCO) for Pools 1 and 2 and MCLP Asset Company, Inc. (Goldman Sachs) for Pool 3, each awarded individually. The transaction is expected to close on June 17, 2022. The pools were marketed with Citigroup Global Markets Inc. as advisor.

The loan pools awarded in this most recent transaction include:

• Pool 1: 1,925 loans with an aggregate UPB of $595,670,413; average loan size of $309,439; weighted average note rate of 3.64%; and weighted average broker's price opinion (BPO) loan-to-value ratio of 63%.
  
  
• Pool 2: 3,706 loans with an aggregate UPB of $507,534,359; average loan size of $136,949; weighted average note rate of 4.26%; and weighted BPO loan-to-value ratio of 50%.
  
  
• Pool 3: 1,928 loans with an aggregate UPB of $365,402,568; average loan size of $189,524; weighted average note rate of 3.99%; and weighted BPO loan-to-value ratio of 59%.

The cover bids, which are the second highest bids per pool, were 89.10% of UPB (50.04% of BPO) for Pool 1, 93.07% of UPB (37.24% of BPO) for Pool 2, and 88.59% of UPB (44.73% 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, 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 Fannie Mae's recent loan sale transaction about?

Fannie Mae announced a sale of approximately 7,500 reperforming loans worth $1.47 billion, closing on June 17, 2022.

Who were the winning bidders for Fannie Mae's loan sale?

The winning bidders were Pacific Investment Management Company LLC (PIMCO) for Pools 1 and 2, and Goldman Sachs for Pool 3.

What are the terms for buyers of Fannie Mae's reperforming loans?

Buyers must offer loss mitigation options to borrowers who may re-default within five years post-sale.

What is the significance of the loan sale's unpaid principal balance?

The unpaid principal balance of $1.47 billion indicates the scale and impact of the loan sale in the market.