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29 » VISIT US ONLINE @ DSNEWS.COM GSES MAKING PUSH TO CLEAR NPLS FROM PORTFOLIOS, HELP BORROWERS WITH LOSS MITIGATION With Fannie Mae's announcement that it will begin selling pools of nonperforming single- family mortgage loans, it is clear the GSEs are making a strong push to rid themselves of the backlog of deeply delinquent loans on their books five years after the peak of the foreclosure wave. e Federal Housing Finance Agency (FHFA), which has been the conservator of Fannie Mae and Freddie Mac since September 2008, wants the two GSEs to clear out non- performing loans (NPLs) from their portfolios. Freddie Mac has conducted three sales of NPLs totaling $1.97 billion in unpaid principal balance in the last eight months, while Fannie Mae's recently announced sale will be its first. It will likely not be the last, though; Fannie Mae's SVP for credit portfolio management, Joy Cianci, said the GSE is intent on "building these sales into a regular, programmatic offering to the market." e two GSEs are not merely trying to excise these loans from their books. Many of the loans are two or even three years delinquent, meaning the borrowers who occupy the homes are in some stage of mitigation or are in foreclosure. e FHFA wants to help borrowers in these cases avoid foreclosure at all costs. In early March, FHFA issued enhanced requirements for the buyers and servicers of agency NPLs that call for bidders to identify servicing partners at the time of qualification and complete a questionnaire to demonstrate a record of successful loan resolution through foreclosure alternatives. Also, as part of the enhanced requirements, servicers who purchase nonperforming agency loans must apply a "waterfall of resolution tactics" before resorting to foreclosure and report loan resolution results and borrower outcomes to Fannie Mae and Freddie Mac for four years after the NPL sale. "ese 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," Cianci said. According to the FHFA's most recent foreclosure prevention report issued in late March, Fannie Mae and Freddie Mac completed 307,200 foreclosure prevention actions in 2014 and have completed 3.4 million such actions since the conservatorship began in September 2008. Foreclosure prevention actions include home retention actions—such as permanent loan modifications, repayment plans, and forbearance plans—as well as home forfeiture actions—such as short sales and deeds-in-lieu of foreclosure. Freddie Mac's most recent NPL sale occurred on March 25, when it sold 5,398 deeply delinquent loans in three pools with a combined $985 million in unpaid principal balance. It was Freddie Mac's largest NPL sale; the previous two sales were in February for $392 million and in August 2014 for $596 million. There were approximately 39,000 completed foreclosures nationwide in February, a month-over- month decline of 11.6 percent and a year-over-year decline of 15.7 percent, according to CoreLogic. KNOW THIS