Winning Bidders Announced in Recent NPL Sale

Fannie Mae BHFannie Mae announced the winning bidders for its seventh non-performing loan sale, according to a recent release from the GSE. The sale included approximately 6,800 loans totaling $1.06 billion in unpaid principal balance, divided among four pools.

The winning bidders for the transaction are MTGLQ Investors, L.P. (Goldman Sachs) for the first pool, PRMF Acquisition LLC (Neuberger Berman) for the second pool, LSF9 Mortgage Holdings LLC (Lone Star) for the third pool, and MFA Financial, Inc. (MFA) for the fourth pool. The transactions are expected to close on October 25, 2016.

Fannie Mae states that they began marketing these loans to potential bidders on August 10, 2016 in collaboration with Wells Fargo Securities, LLC and The Williams Capital Group, L.P. Bids are due separately on Fannie Mae’s fifth Community Impact Pool on September 15, 2016, which is also part of the offering.

The loan pools awarded in this most recent transaction:

  • Group 1 Pool: This pool includes 2,887 loans with an aggregate unpaid principal balance of $468,901,523. It also has average loan size $162,418, a weighted average note rate 5.49 percent, weighted average delinquency of 44 months, and a weighted average broker’s price opinion loan-to-value ratio of 108 percent.
  • Group 2 Pool: This pool includes 1,551 loans with an aggregate unpaid principal balance of $234,057,619. It also has average loan size $150,908, a weighted average note rate 5.55 percent, weighted average delinquency of 45 months, and a weighted average broker’s price opinion loan-to-value ratio of 97 percent.
  • Group 3 Pool: This pool includes 1,638 loans with an aggregate unpaid principal balance of $237,997,902. It also has average loan size $145,298, a weighted average note rate 5.49 percent, weighted average delinquency of 33 months, and a weighted average broker’s price opinion loan-to-value ratio of 110 percent.
  • Group 4 Pool: This pool includes 751 loans with an aggregate unpaid principal balance of $123,913,046. It also has average loan size $164,997, a weighted average note rate 5.12 percent, weighted average delinquency of 39 months, and a weighted average broker’s price opinion loan-to-value ratio of 124 percent.

The cover bid, which is the second highest bid, for Pool 1 is 63.5 percent of UPB and 56.9 percent of Broker Price Opinion (BPO), for Pool 2 is 72.4 percent of UPB and 57.3 percent of BPO, for Pool 3 is 65.2 percent of UPB and 58.1 percent of BPO, and for Pool 4 is 67.1 percent of UPB and 73.1 percent of BPO.

Additionally, the release notes that on April 14, 2016, the Federal Housing Finance Agency (FHFA) announced additional enhancements to its requirements for sales of non-performing loans by Fannie Mae and Freddie Mac. These enhancements build on the requirements originally announced in March 2015. They also encourage sustainable modifications that have the potential to provide more borrowers the opportunity for home retention by requiring evaluation of underwater borrowers for modifications. These may include principal and/or arrearage forgiveness, forbidding “walking away” from vacant homes, and establishing more specific proprietary loan modification standards.

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