Fannie Mae has launched its fourth reperforming-loan sale of the year — an offering of 6,130 loans with an unpaid principal balance of $997 million.
The offering, dubbed FNMA 2022-RPL4, represents the agency’s 27th sale of reperforming loans since the inaugural offering in October 2016, which involved a pool of 3,600 reperforming loans valued at about $806 million.
A reperforming loan is a mortgage that has been or is currently delinquent but has been reperforming for a period of time.
The FNMA 2022-RPL4 transaction involves three loan pools — with pool 1 composed of loans with about $341.6 million in unpaid principal balance; pool 2 is at $342.5 million; and pool 3, $312.9 million.
Loans in Pools 1 thru 3 are being serviced by New Residential Mortgage LLC, NewRez LLC and Fannie Mae — and subserviced by NewRez LLC, Fannie’s fact sheet on the deal states. (The parent company of New Residential Mortgage, Caliber Home Loans and NewRez — New Residential Investment— earlier this summer was rebranded as Rithm Capital.)
The reperforming-loan sale is slated to close by late October 2022, after due-diligence period. The loan offering is being marketed with assistance from Citigroup Global Markets Inc.
“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,” Fannie’s announcement of the reperforming loan sale states. “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.”
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The Federal Housing Finance Agency oversees Fannie Mae and its sister government-sponsored enterprise Freddie Mac, which have been in conservatorship since 2008 in the wake of the global financial crisis. The two GSEs, or agencies, buy loans from lenders, pool them and issue mortgage-backed securities that are sold to investors and guaranteed for a fee by Fannie and Freddie.
Fannie Mae attempts to sell its reperforming loans to investors, nonprofits and public-sector organizations.
“Fannie Mae’s sales of non-performing loans … are intended to reduce the number of seriously-delinquent loans that Fannie Mae owns, to help stabilize neighborhoods and to help meet the portfolio reduction targets required under [Fannie Mae’s] senior preferred stock purchase agreement with the United States Treasury,” the program description states.
Bids for the FNA 2022-RPL4 offering are due by Sept. 8. Buyers are required to offer loss mitigation options to borrowers who re-default within five years of the closing of the sale of the reperforming-loan portfolio.
The three early reperforming loans sales this year included an offering unveiled in February of 8,050 reperforming loans valued at $1.3 billion (FMNA 2022-RPL1); a second deal (FMNA 2022-RPL2) announced in April of 7,600 reperforming loans valued at $1.49 billion; and the third sale (FMNA 2022-RPL3) was announced in early June, with bids due last month, and involved 10,000 reperforming loans valued at $1.57 billion.
Through four offerings to date, Fannie Mae has brought to market 31,780 reperforming loans valued at $5.4 billion, which is about one-third of the loan volume and count offered in total for all of 2021. Fannie Mae last year put on the market some 100,000 reperforming loans across five offerings with an aggregate unpaid principal balance of $14.5 billion, according to an analysis of the agency’s records.
By comparison, over the same period in 2020, as the pandemic raged and government protections kicked in, a total of 57,235 RPLs were put on the sales block by Fannie Mae through four pool offerings that had a total unpaid principal balance of $8.7 billion — or a bit more than half of the RPL sales by loan count and $5.7 billion shy of the 2021 aggregate value mark.
In 2019, prior to the pandemic, Fannie brought to market nearly 104,000 reperforming loans valued in total at $17.1 billion.
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