#USA #Washington #Fannie Mae #Non-Performing Loans #Loan Sale

Fannie Mae's Loan Sale Overview

Fannie Mae, a cornerstone of the U.S. housing finance system, has announced results from its most recent non-performing loan sale, marking an important step in its efforts to support homeownership and stabilize the housing market. This transaction, identified as the twenty-sixth of its kind, included substantial volumes of deeply delinquent loans, totaling approximately $193 million in unpaid principal balance (UPB). Here's a closer look at the specifics of this significant sale.

Transaction Details

On April 22, 2025, Fannie Mae revealed this latest sale, which culminated in a competitive bidding process for two distinct loan pools. The first pool consisted of 335 loans, carrying an aggregate UPB of $60,434,423. Meanwhile, the second pool comprised 742 loans with a total UPB of $132,756,831. This strategic approach to managing non-performing loans reflects Fannie Mae's commitment to addressing both borrower and community needs during challenging financial times.

Insights from the Winning Bidders

The winning bids for the loan pools reflected a strong interest in maximizing recovery from these assets. For Pool 1, the victorious bidder, Residential Credit Opportunities IX, LLC, sought to innovate in loss mitigation while maintaining the integrity of the borrower experience. Pool 2 was awarded to VRMTG ACQ, LLC (a subsidiary of VWH Capital Management, LP), also emphasizing a strategic outlook on loan management.

Both bidders are required to honor approved or in-process loss mitigation efforts associated with each loan at the time of the sale. This includes the need to provide delinquent borrowers with a range of loss mitigation options designed to maintain homeownership, such as loan modifications that may include principal forgiveness before any foreclosure efforts are initiated.

The Bigger Picture

By facilitating the sale of non-performing loans, Fannie Mae aims to revitalize the market while preventing neighborhoods from falling into disrepair. These transactions not only create opportunities for recovery but also signal to borrowers that resolution options are available. The meticulous planning and execution of this sale exemplify how Fannie Mae strives to balance the financial health of its operations with the social responsibility of supporting distressed homeowners.

Comparisons and Considerations

The average loan size in Pool 1 was approximately $180,401, with a weighted average note rate of 4.37%, while Pool 2 had a slightly lower average loan size of $178,912 with a 4.42% note rate. Both pools shared a similar weighted average broker's price opinion (BPO) loan-to-value ratio of about 41%, indicating a structured approach to manage risk in these transactions.

Furthermore, the cover bids for both pools highlighted the competitive nature of the sale, with bids reaching 103.79% of UPB for Pool 1 and 104.36% for Pool 2, which demonstrates the value investors see in these assets despite their distressed status.

Conclusion

This loan sale transaction is yet another example of Fannie Mae’s ongoing efforts to navigate complex market challenges while providing tangible solutions for homeowners in distress. As the organization prepares for the closing of this transaction on July 8, 2025, it remains focused on creating pathways toward recovery for both borrowers and the broader housing market. By continuing to engage in such transactions, Fannie Mae reinforces its critical role in supporting American homeownership during tough economic times.