Fannie Mae’s latest repeatable loan sale deal includes more than 6,000 loans
The results of Fannie Mae’s twenty-seventh recurring loan sale transaction, announced on August 11, 2022, included the sale of approximately 6,060 loans totaling $986.4 million in outstanding principal balance (UPB), split into three pools. The winning bidders were Pacific Investment Management Company LLC (PIMCO) for Pool 1, DLJ Mortgage Capital Inc. (Credit Suisse) for Pool 2, and Sutton Funding, LLC (Barclays) for Pool 3, each awarded individually. The transaction is expected to close by October 26, 2022. The pools were marketed with Citigroup Global Markets Inc. as advisor.
Pool 1 included 1,790 loans with a total UPB of $337,792,657; average loan size of $188,711; weighted average note rate of 3.65%; and a weighted average broker opinion (BPO) loan-to-value ratio of 50%.
Pool 2 had 2,217 loans with a total UPB of $338,897,140; average loan size of $152,863; weighted average rate of the notes of 4.04%; and a weighted average broker opinion (BPO) loan-to-value ratio of 60%.
Pool 3 included 2,055 loans with a total UPB of $309,709,953; average loan size of $150,710; weighted average note rate of 4.08%; and a weighted BPO loan-to-value ratio of 55%.
Cover bids, which are the second highest bids per pool, were 85.56% UPB (36.86% BPO) for pool 1, 87.50% UPB (40.17% of BPO) for pool 2 and 85.42% of UPB (38.36% of BPO) for group 3.
Reproductive loans are loans that have been or are currently in arrears but have been reproductive for a period of time. The terms of Fannie Mae’s repeat loan sale require the buyer to provide loss mitigation options to any borrower likely to default again within five years of the closing of the repeat loan sale. All buyers are required to honor all loss mitigation efforts approved or in progress at the time of the sale, including forbearance agreements and loan modifications. In addition, buyers should offer defaulting borrowers a cascade of loss mitigation options, including loan modifications, which may include forgiveness of principal, before initiating foreclosure on any loan.
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