Winner of Fannie Mae’s Non-Performing Loan Pool Takes It All

fannie-new-logoFannie Mae announced on Monday that The Community Loan Fund of New Jersey, Inc., an affiliate of New Jersey Community Capital, a non-profit community development financial institution, is the winning bidder on the GSE’s fifth Community Impact Pool of non-performing loans.

Fannie Mae anticipates this transaction to close on November 22, 2016, and it is set to include 120 loans secured by properties located in the Miami, Florida area with an unpaid principal balance of approximately $20.3 million.

Fannie Mae began marketing this Community Impact Pool to potential bidders on August 10, 2016 in collaboration with Wells Fargo Securities, LLC and The Williams Capital Group, L.P.

The loan pool awarded in this most recent transaction includes 120 loans with an aggregate unpaid principal balance of $20,280,326.61. It also includes an average loan size of $169,003 and a weighted average note rate of 5.23 percent. Additionally, the transaction entails a weighted average delinquency of 42 months as well as a weighted average broker’s price opinion loan-to-value ratio of 111 percent.

Fannie Mae reports that the cover bid price for this Community Impact Pool is 56.6 percent of unpaid principal balance – 52.4 percent of Broker Price Opinion.

On April 14, 2016, the Federal Housing Finance Agency announced additional enhancements to its requirements for sales of non-performing loans by Fannie Mae and Freddie Mac that build on requirements originally announced in March 2015.

The additional requirements, which apply to this Fannie Mae non-performing loan sale, encourage sustainable modifications that have the potential to give more borrowers the opportunity for home retention by requiring evaluation of borrowers with underwater loans for modifications that may include principal and/or arrearage forgiveness; forbidding “walking away” from vacant homes; and establishing more specific proprietary loan modification standards.

Fannie Mae notes that potential buyers can register for ongoing announcements or training, and find more information on Fannie Mae’s sales of non-performing loans and on the Federal Housing Finance Agency’s guidelines for these sales on their site.

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