Fannie Mae is auctioning a pool of 18,400 reperforming loans with unpaid principal balance of approximately $3.59 billion.
Reperforming loans are mortgages that were previously delinquent but are performing again because payments have become current, typically a result of a loan modification.
This is the government-sponsored enterprise’s eighth reperforming loan sale as it continues with its effort to shrink its retained mortgage portfolio in order to better protect taxpayers.
The sale is being marketed in collaboration with Citigroup Global Markets Inc.
Bids are due on Sept. 6.
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.
In addition, buyers must report on loss mitigation outcomes. Any reporting requirements cease once a loan has been current for 12 consecutive months after the closing of the reperforming loan sale.
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