Investment firm to offer loss mitigation options for borrowers
Fannie Mae has sold $1.47 billion in performing loans to Pacific Investment Management Company (PIMCO) as part of its 31st reperforming loan sale transaction, the government-sponsored enterprise (GSE) announced.
The deal involved three pools of loans totaling 6,484 mortgages with an aggregate unpaid principal balance of $1.47 billion. PIMCO was the winning bidder for all three pools, which were awarded individually.
Pool 1 comprises 2,959 loans with an average size of $225,481 and an average interest rate of 3.204%. Pool 2 consists of 2,197 loans with an average size of $226,941 and an average interest rate of 3.208%. The final Pool 3 includes 1,328 loans with an average size of $225,554 and an average interest rate of 3.201%.
The cover bid, representing the second-highest bid for each pool, ranged from 78.554% to 78.870% of the unpaid principal balance.
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Reperforming loans are mortgages that had previously been delinquent but have resumed performing for a period of time. As part of the sale terms, the buyer must offer loss mitigation options like loan modifications to any borrower re-defaulting within five years after closing.
“All purchasers are required to honor any approved or in-process loss mitigation efforts at the time of sale, including forbearance arrangements and loan modifications,” Fannie Mae stated in a news release.
The transaction is expected to close by June 25, 2024. Citigroup Global Markets Inc. acted as advisor for marketing the pools.
Earlier this week, Fannie Mae announced the appointment of tech industry veteran Diane Lye to its board of directors. The GSE also unveiled enhancements to its new web-based Income Calculator that aims to improve income verification for self-employed borrowers.
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