Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) rose steeply yesterday after it announced the marketing for sale of its first pool of nonperforming loans (NPLs). In a press note, the housing company said that it is putting a first block of NPL on sale, which consists of nearly 3,200 loans with $786 million of unpaid principal. The block of these loans is available to qualified bidders for purchase.
$786 million of unpaid principal
The company said that the sale will take place in two pools, where the first pool will carry nearly $180 million in unpaid principal while the second pool will comprise the balance out of $786 million. Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) further mentioned that the sale of NPLs is marketed by Credit Suisse and Bank of America Merrill Lynch, while The Williams Capital Group will act as advisors.
At the same time, Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA)’s Senior Vice President for credit portfolio management, Joy Cianci said that the sale of NPLs will not only help trim down soured loans but will also prevent foreclosure possibilities. He added that the company is planning to build these type of sales into a well-designed offering and aspires to work with a wide range of potential buyers, right from small investors to non-profit organizations.
As per Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA), the bid will take place on May 6, and the sale is expected to happen in June. The sale came on the heels of the Federal Housing Finance Agency’s guidelines that directed the housing entity to transfer soured loans to mortgage servicers. While this is Fannie Mae’s first sale, its counterpart, Freddie Mac has already sold extremely delinquent loans comprising $596 million of unpaid principal over the last six months.
The stock of Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) reported a surge by 6.83% to $2.66, and an average volume of shares remained 5.15 million.