Fannie Mae sells $20.3m NPLs to familiar non-profit

Frequent buyer snaps up deeply delinquent mortgages

Houseing Wire - September 26, 2016 Ben Lane

Fannie Mae broke with tradition recently when it announced plans to sell a pool of non-performing loans through its “Community Impact Pool” program to a private equity firm, rather than the non-profits, small investors and minority- and women-owned businesses it is designed to target.

In each of the previous three “Community Impact Pool” sales, Fannie Mae sold the smaller pools of loans to New Jersey Community Capital, which is a non-profit community development financial institution, or one of its affiliates.

In its fourth Community Impact Pool sale, Fannie Mae selected Corona Asset Management XVIII, LLC as the winning bidder.

But in its fifth Community Impact Pool sale, Fannie Mae is turning back to a non-profit, and a familiar one at that – The Community Loan Fund of New Jersey, an affiliate of New Jersey Community Capital.

This sale includes 120 deeply delinquent loans secured by properties located in the Miami, Florida area that carry an unpaid principal balance of approximately $20.3 million.

Fannie Mae originally announced the sale last month, as part of a $1 billion sale of non-performing loans.

The loans in sale carry an aggregate unpaid principal balance of $20,280,326.61, an average loan size of $169,003, and carry a weighted average note rate of 5.23%.

The loans also have a weighted average delinquency of 42 months, and a weighted average broker's price opinion loan-to-value ratio of 111%.

According to Fannie Mae, this sale of non-performing loans is being marketed in collaboration with Wells Fargo Securities and The Williams Capital Group as advisors.

The loans in this sale subject to the new rules for non-performing loan sales announced by the Federal Housing Finance Agency in April.

Among those rules are that buyers of purchase non-performing loans from Fannie Mae orFreddie Mac must now evaluate certain underwater borrowers for modifications that include principal and/or arrearage forgiveness.

Buyers are also forbidden from “walking away” from vacant homes, and the new rules establish more specific proprietary loan modification standards for NPL buyers.

According to the FHFA, these new rules are designed to minimize foreclosures, help mitigate the potential for neighborhood blight and decay, and help improve loan modification success rates.

Fannie Mae said that it expects the deal to close on Nov. 22, 2016.