One thorn of experience is worth a whole wilderness of warning.
James Russell Lowell
By Mark Heschmeyer April 8, 2015
It did not take Freddie Mac long to take advantage of the new enhanced requirements issued by its overseer, the Federal Housing Finance Agency (FHFA), allowing the sale of non-performing loans announced just last month.
At month’s end Freddie Mac executed the largest-ever sale of seriously delinquent loans from its investment portfolio. Freddie Mac accepted bids via auction of 5,398 deeply delinquent non-performing loans (NPLs). The loans have an aggregate unpaid principal balance (UPB) of $985 million (an average of $182,475 per loan). The loans have been delinquent for three years on average.
The loans were offered as three separate pools of mortgage loans, and investors had the flexibility to bid on one or more pools, or bid on the aggregate of all three pools. GCAT Management Services 2015-13 LLC was the winning bidder on all three pools. The cover bid prices (second highest bids) were in the low 80s percent of UPB for Pool #1, in the low 70s percent of UPB for Pool #2 and in the mid 70s percent of UPB for Pool #3.
The transaction is expected to settle in early May 2015. Freddie Mac would not provide additional information on the winning bidder.
Freddie Mac, through its advisors, began marketing the loans on March 2 to potential bidders, including minority and women-owned businesses, non-profits, neighborhood advocacy funds and private investors active in the NPL market.
It was on March 2, that Freddie Mac’s regulator and conservator, the Federal Housing Finance Agency (FHFA), announced enhanced requirements for NPL sales.
New requirements on winning bidders’ servicers include evaluating borrowers for eligibility in FHFA’s Home Affordable Modification Program (HAMP) or for loan modification that must not include an upfront fee or require prepayment of any amount of mortgage debt. Foreclosure must be the last resort option and servicers are encouraged to sell properties that have gone through foreclosure to individuals who will occupy the property as their primary residence or to non-profits.
FHFA approved NPL sales by the government-sponsored enterprises to reduce the number of severely delinquent loans held in their inventories and to transfer risk to the private sector.
“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,” said FHFA Director Melvin L. Watt.
Under a pilot program, Freddie Mac previously 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 in February 2015 covering $392 million of UPB.
FHFA’s enhanced requirements for future NPL sales are based, in part, on a review of those initial sales as well as other considerations.
The requirements are expected to encourage broad participation by potential investors and provide for future publication of aggregate data about borrower outcomes.
Fannie Mae today began marketing its first bulk-sale of NPLs. The pool consists of approximately 3,200 loans totaling $786 million in unpaid principal balance.
“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.”
I am actively looking to build relationships with Real Estate Investors and Owner / Users for Phoenix – Scottsdale – Tucson – Maricopa County – Pima County – Pinal County – Cochise County – Santa Cruz County –Yavapai County – Gila County – Arizona , USA
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1
Timeline of Phoenix, Arizona history
http://en.wikipedia.org/wiki/Timeline_of_Phoenix,_Arizona_history
2
http://en.wikipedia.org/wiki/Phoenix,_Arizona
3
Facts of Arizona – year 1848 to 2013
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