Fannie Details Buyback Plans

Fannie Mae anticipates buying between 150,000 and 200,000 seriously delinquent loans from mortgage-backed securities (MBS) trusts this month, the company announced Monday. Last month, the government-sponsored enterprise announced it would significantly increase its purchases of loans from single-family MBS trusts that are delinquent by four or more consecutive monthly payments.

In its Feb. 10 announcement, Fannie Mae reported that the total dollar volume (measured by scheduled unpaid principal balance) of all loans that were four or more months delinquent in its single-family MBS as of Dec. 31, 2009, was approximately $127 billion.

On Monday, the mortgage giant said it expects to continue purchasing loans in each of the subsequent few months until it has "substantially reduced the current population of loans that are four or more months delinquent."

When determining which loans to purchase, Fannie Mae says it prioritizes mandatory purchases (such as modified loans and loans that become 24 months delinquent), loans in MBS having the highest MBS pass-through rates, loans backing CL or CI prefixes, and lastly, loans having the highest unpaid principal balances.

SOURCE: Fannie Mae


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