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Fannie Completes Bulk REO Sale, Another in the Works?

Fannie Mae recently completed a bulk sale of 260 homes with 10 different investors acquiring the properties, which were classified as 'real estate owned.'

"This was the worst of the worst," said one investor, requesting anonymity. The sale of the lots are in the process of closing, said the investor. National Mortgage News first reported on the auction this past fall. No price was disclosed.

Sources close to the auction confirmed the sale results. Moreover, the GSE is contemplating a larger bulk sale in the company months. A company spokeswoman declined to comment but stressed that the Fannie's preference is to sell its REO inventory to owner occupants and not investors. At the end of September Fannie had an REO inventory of 72,275 homes. During the first nine months of the year it acquired 98,428 homes through foreclosure while selling 89,691.

Meanwhile, in other workout news, Citigroup may test the auction waters with a $400 million portfolio of troubled mortgages, according to investment banking sources who have been briefed on the offering.

One buyer of troubled loans told Managing REO that Citigroup is already "fishing for bids" on the package.

A spokesman for Citi's mortgage group declined to comment. Very few large package of nonperforming loans have changed hands over the past year unless the Federal Deposit Insurance Corp. is involved in the transaction as a partner or guarantor of some sort.