The government-sponsored enterprises are moving nearly $6 billion in reperforming residential loans off of their balance sheets.
The Federal National Mortgage Association said Tuesday that it is marketing the sale of approximately 18,400 loans that have an aggregate unpaid principal balance of $3.59 billion.
The home loans were previously delinquent but are performing again. The mortgages were cured with and without the use of a loan modification.
“The terms of Fannie Mae’s reperforming loan sale require the buyer to offer loss mitigation options designed to be sustainable to any borrower who may re-default within five years following the closing of the reperforming loan sale,” the Washington-based company said. “In addition, buyers must report on loss mitigation outcomes. Any reporting requirements cease once a loan has been current for twelve consecutive months after the closing of the reperforming loan sale.”
Bids for the offering, which is being marketed in collaboration with Citigroup Global Markets Inc., are due by Sept. 6.
On Friday, Fannie’s secondary cousin, the Federal Home Loan Mortgage Corp., reported that it priced a Seasoned Credit Risk Transfer Trust. It was the third and largest offering this year.
According to McLean, Virginia-based Freddie Mac, SCRT, Series 2018-3 is a roughly $2.3 billion rated securitization of both guaranteed senior and unguaranteed subordinate securities.
The 11,716 fixed- and step-rate modified loans included in the trust are seasoned and reperforming at least 12 months.
Select Portfolio Servicing Inc. is the servicer on the loans.
J.P Morgan Securities, LLC and Citi are co-lead managers and joint bookrunners, while Credit Suisse Securities LLC, Wells Fargo Securities LLC and The Williams Capital Group LP are the deal co-managers.
The issuance is expected to settle Wednesday.
Fannie reported an investment portfolio of $226 billion as of June 30, while Freddie’s stood at $236 billion.
