WASHINGTON, DC—Fannie Mae has announced it will begin offering pools of non-performing single-family mortgages for sale to interested buyers. Its first transaction will be marketed in the near future, the GSE says. This will be followed by other offerings, some of which will be targeted for smaller-sized investors as well as women and minority-owned businesses and non-profits.
The driver behind the NPL sales is, of course, the desire to get non-performing assets off of its balance sheet. This motivation was in play, incidentally, with Freddie Mac's recent rollout of its 55-Day Participation Certificate pass-through security.
"These transactions are intended to reduce the number of seriously delinquent loans that Fannie Mae owns, to help stabilize neighborhoods, and to offer borrowers access to additional foreclosure prevention options," says Joy Cianci, Fannie Mae's Senior Vice President for Credit Portfolio Management, in a prepared statement.
Fannie Mae declined to comment beyond the press release.
Investors that target such assets will likely welcome Fannie Mae's entrance into the market. In general, distress opportunities on banks' balance sheets have been shrinking as the economy and housing market recovers.
Last month RealtyTrac released its February 2015 foreclosure report, which showed that default notices, scheduled auctions and bank repossessions were reported on 101,938 US properties that month, a decrease of 4% from revised January numbers and down 9% from a year ago to the lowest level since July 2006.
In short, the company said, nationwide foreclosure activity is on track to return to historic norms this year — and is possibly even headed below historic norms.
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