After announcing last week that it intended to join Freddie Mac in selling off pools of non-performing loans, Fannie Mae released the details of its first sale on NPLs.
According to Fannie Mae, it is currently marketing its first NPL sale, which features a pool of approximately 3,200 loans totaling $786 million in unpaid principal balance.
The pool is available for purchase by qualified bidders, Fannie said.
The NPL sale will be offered in two pools. The first pool carries approximately $180 million in unpaid principal balance. The second pools carries $606 million unpaid principal balance.
Fannie Mae said that the sale is marketed with Bank of America Merrill Lynch, Credit Suisse and The Williams Capital Group acting as advisors.
“We are pleased to offer this first transaction, which will help us reduce the number of seriously delinquent loans we own while providing additional foreclosure prevention opportunities,” said Joy Cianci, Fannie Mae’s senior vice president for credit portfolio management.
“We plan to build these sales into a programmatic offering, and look forward to working with a diverse range of potential buyers over time, including smaller investors, nonprofit organizations and minority- and women-owned businesses,” Cianci added.
According to Fannie, bids for the NPL sale are due on May 6 and sale is expected to close in June.
Fannie’s first sale of NPLs meets the directive laid out by the Federal Housing Finance Agency, which outlined the new requirements for sales of NPLs by Freddie Mac and Fannie Mae to ensure the loans are transferred to capable mortgage servicers.
While Fannie is still in the planning stages of its first NPL offering, Freddie recently disclosed that it had already sold severely delinquent loans through two transactions in the past six months — one in August 2014 covering $596 million of unpaid principal balance, and the other on Feb. 5, 2015 covering $392 million of UPB.
The FHFA’s new standards for NPL sales were based on those two pilot sales.
"FHFA expects that with these enhanced requirements, NPL sales by Freddie Mac and Fannie Mae will result in more favorable outcomes for borrowers and local communities, while also reducing losses to the Enterprises and, therefore, to taxpayers," FHFA Director Melvin Watt said last month. "Under the requirements announced, servicers must consider borrowers for a range of alternatives to foreclosure."
