FHA Preparing for March Nonperforming Loan Sale

The Federal Housing Administration is gearing up for another nonperforming note sale with a bid date scheduled for March 13.

SEBA Professional Services is managing the single-family loan sale for FHA. DebtX, the marketing agent for the sale, could not provide any details, such as the number of loans and geographic concentration of the loan pools.

More details will be “available in the coming weeks,” a DebtX spokesman said. “The data room will open in February,” he added.

The March sale is expected to be similar to the September sale where FHA sold 5,300 in defaulted single-family loans to investors who paid $368.3 million for loans. That represented 39% of the unpaid principal balance of the loans.

The September sale (SFLS 2012-1) featured six loan pools and there were five winning bidders.

Under the terms of the sale, the loans are no longer government insured and the bidders cannot foreclose for at least six months. This limitation is designed to give servicers enough time to modify or refinance notes, allowing borrowers one last chance to save their home.

FHA also auctioned off 4,100 nonperforming loans in September to 10 nonprofit and community-based organizations that specialize in affordable housing. These buyers cannot foreclose on the loans for several years. Another Neighborhood Stabilization loan sale is slated for March 20.

The Federal Housing Administration wants to sell 40,000 loans a year via the quarterly sales to reduce its portfolio of seriously delinquent loans.

As of Nov. 30, FHA had 735,230 insured loans that are 90 days or more past due, which represents a 9.5% serious delinquency rate.