Fannie Mae Sells $1.2B in Non-Performing Loans

Fannie Mae’s latest sale of non-performing loans includes three pools of about seven thousand loans totaling $1.2 billion in unpaid principal balance. Credit Suisse Securities, J.P. Morgan Securities, Bank of America Merrill Lynch and the Williams Capital Group L.P. are collectively marketing the sale of the loans.

Joy Cianci, senior vice president for Credit Portfolio Management at Fannie Mae, said it’s the third sale of non-performing loans and is intended to reduce the number of severely delinquent loans held by Fannie Mae while giving borrowers more options to avoid foreclosure.

"As with previous loan sales, servicers are required to apply a range of options to help borrowers avoid foreclosure whenever possible,” she said. "These actions help in stabilizing neighborhoods and reducing severely delinquent loans on our books.”

The terms of Fannie Mae’s non-performing loan transactions require that when a foreclosure can't be prevented, the loan owner must market the property to owner-occupants and non-profits exclusively before offering it to investors.

In August, Fannie Mae announced that Lone Star Funds, or more specifically the private equity's trust LSF9 Mortgage Holdings, won Fannie Mae’s second sale of non-performing loans. The purchase included two pools from Fannie Mae that included approximately 3,900 loans totaling $765 million in unpaid principal balance.

LSF9 Mortgage Holdings also was the winning bidder in a deeply delinquent loan sale earlier this year from Freddie Mac. In that sale, LSF9 Mortgage Holdings purchased 1,052 deeply delinquent Ocwen-serviced non-performing loans that carried an aggregate unpaid principal balance of $201 million.