The Federal Housing Administration is selling nearly 12,500 nonpreforming loans totaling $2.23 billion on March 20, according to DebtX, which is marketing the sale for FHA.
The single-family loan sale (2013-1) will feature 10 pools with collateral spread throughout the U.S. with concentrations in Florida, Illinois, New York and New Jersey.
The largest pool has a $427 million unpaid principal balance and the smallest pool has a $48.6 million UPB.
Last September, FHA conducted a similar sale of 5,300 defaulted, uninsured loans and the winning bidders paid $368.3 million for loans. That represented 39% of the unpaid principal balance of the loans.
FHA has a large inventory of seriously delinquent loans and it is using the loan sales to dispose of loans where the servicer has exhausted all loss mitigation options.
Under the terms of the sale, the successful bidders cannot foreclose for six months. This restriction is intended to give borrowers one last chance for a loan modification.
Bayview Asset Management, Coral Gables, Fla.; Kondaur Capital Corp. of Orange, Calif.; MCM Capital Partners in Cleveland; and Lone Star Funds in Dallas have participated in previous
FHA intends to sell 40,000 nonperforming loans this year. The March “sale is another significant milestone for HUD in achieving its single-family loan sale goals,” said Erhiuvie Abu, president and chief executive of SEBA Professional Services LLC. SEBA is managing the sale for FHA.
On March 27, FHA will conduct a Neighborhood Stabilization sale that will feature five pools with 4,000 nonperforming loans totaling $639 million.
Bidders in the Neighborhood Stabilization sales are generally nonprofits and community-based originations that specialize in affordable housing. Winning bidders cannot foreclose for three years. They are expected to modify the loan, lease the property back to the homeowner or complete a short sale to an owner-occupant.
