Fannie Mae Sells $203M Non-Performing Loan Portfolio to Residential Credit Opportunities Trust
Event summary
- Fannie Mae sold a portfolio of 919 non-performing loans with a total unpaid principal balance of $203.3M.
- The winning bidder was Residential Credit Opportunities Trust IX-D, with the transaction expected to close by November 4, 2026.
- The average loan size was $221,222, with a weighted average note rate of 4.31% and a loan-to-value ratio of 48%.
- The cover bid was 100.375% of UPB (48.56% of BPO).
- Purchasers must honor loss mitigation efforts and offer delinquent borrowers options like loan modifications before foreclosure.
The big picture
Fannie Mae's sale of non-performing loans is part of its ongoing strategy to manage risk and maintain liquidity in the mortgage market. The transaction reflects the continued interest in distressed assets among specialized investors, despite regulatory constraints. The scale of the sale, at $203.3M in UPB, underscores the volume of non-performing loans still in the market, highlighting the broader challenges in the housing sector.
What we're watching
- Market Dynamics
- How the sale of non-performing loans will impact the broader mortgage market and investor appetite for distressed assets.
- Regulatory Compliance
- Whether purchasers will adhere to Fannie Mae's requirements for loss mitigation and foreclosure prevention.
- Execution Risk
- The pace at which Residential Credit Opportunities Trust IX-D can integrate and manage the acquired loan portfolio.