Fannie Mae Announces Plan to Securitize Reperforming Loans

Andrew Wilson

202-752-5168

WASHINGTON, DC – Fannie Mae (FNMA/OTC) plans to begin securitizing reperforming loans held on the company’s balance sheet later this year. Reperforming loans are mortgages on which the borrower had been previously delinquent. Subsequently, the borrower became current on the mortgage either with or without utilizing a mortgage modification plan. Over time, Fannie Mae may elect to sell these mortgage-backed securities to investors, reducing the size of the company’s retained mortgage portfolio.

“With these securitizations we’ll have more flexibility to manage our risk and reduce the size of our portfolio,” said Bob Ives, Vice President of Retained Portfolio Asset Management, Fannie Mae. “Over the long run, these securitizations can benefit investors, Fannie Mae and taxpayers.”

Fannie Mae’s securitization of reperforming loans is expected to begin in the second half of 2016. Potential sales of these securities will be contingent on market conditions and investor interest.

Additional details on the disclosure enhancements made in support of securitizing reperforming loans can be found in the announcement on the Mortgage-Backed Securities web page.