PIMCO buys $412.3 million of reperforming mortgage loans from Fannie Mae

Deal is expected to close in October

PIMCO buys $412.3 million of reperforming mortgage loans from Fannie Mae

Fannie Mae has sold $412.3 million of reperforming loans to Pacific Investment Management Company (PIMCO).

The transaction, expected to close by October 20, included a pool of roughly 2,016 reperforming loans totaling $412.3 million in unpaid principal balance (UPB). Reperforming loans are mortgages that have been, or are currently, delinquent but have reperformed for a period of time.

The weighted average note rate of the loans was 3.44%, and the weighted average broker’s price opinion (BPO) loan-to-value ratio was 54%, according to Fannie Mae. The cover bid, which is the second-highest bid for the pool, was 79% of UPB (36.56% of BPO).

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“The terms of Fannie Mae’s reperforming loan sale require the buyer to offer loss mitigation options to any borrower who may re-default within five years following the closing of the reperforming loan sale,” Fannie Mae said in its news release. “All purchasers are required to honor any approved or in-process loss mitigation efforts at the time of sale, including forbearance arrangements and loan modifications. In addition, purchasers must offer delinquent borrowers a waterfall of loss mitigation options, including loan modifications, which may include principal forgiveness or payment deferral, prior to initiating foreclosure on any loan.”

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