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Fannie Mae has joined the ranks of Freddie Mac in selling delinquent loans to clean up its portfolio. The delinquent loans consist of non-performing single-family mortgages and will be sold in pools to buyers in the near future.
According to a Fannie Mae press release, Joy Cianci—the Senior Vice President for Credit Portfolio Management at Fannie Mae—stated, “These transactions are intended to reduce the number of seriously delinquent loans that Fannie Mae owns, to help stabilize neighborhoods, and to offer borrowers access to additional foreclosure prevention options.”
Freddie Mac has already conducted its own sales beginning in 2014. Its most recent sale occurred last week on March 25 where three pools totaling an aggregate unpaid principal balance of $985 million were sold to a single bidder—GCAT Management Services.
In contrast to the large corporations that purchased hefty pools of Freddie Mac loans, Fannie Mae is appealing to minority- and women-owned businesses, small investors, and non-profit organizations to purchase the non-performing loans.
As these sales become more prevalent, the Federal Housing Finance Agency (FHFA) announced earlier in March new sale requirements for non-performing loans that will help “reduce risk to taxpayers by transferring it to the private sector,” according to its website.
Although Fannie Mae’s sale has not yet occurred, potential buyers can visit the Fannie Mae website for more information regarding the upcoming transaction.