Fannie Mae REO switching to AMCs

[NC Appraising]

They said low volume of REOs. Currently true.

From what I've read, there will not be another 2008 REO bubble where they put all of the REOs on the market forsale.

The new approach will be bundeling up or packaging these homes and selling them to corporate investors. So, I suspect that they will be mostly using their AVMs to price these homes or some other metric.

I guess some may need appraisals? But I think the GSEs know that the level will not be the same if the market crashes in the future. So let the AMCs have the scraps.

 

[TerryRohrer]

Fannie Mae (FNMA) actively sells Non-Performing Loans (NPLs) and Re-Performing Loans (RPLs) as part of its strategy to reduce the size of its retained mortgage portfolio, manage credit risk, and transfer loans to the private sector. From program inception in 2014 through June 30, 2024, the Enterprises (Fannie Mae and Freddie Mac) sold 171,333 NPLs with an aggregate unpaid principal balance (UPB) of $31.4 billion.

Recent NPL Sales Activity (2024–2025)

• Twenty-Seventh NPL Sale (July 2025): Announced on July 8, 2025, involving approximately 1,304-1,352 deeply delinquent loans totaling roughly $285M–$288.8M in UPB, including a Community Impact Pool (CIP) focused on Florida.
• Twenty-Sixth NPL Sale (April 2025): Announced April 22, 2025, featuring ~1,119 loans ($198.6M UPB) and a CIP of ~40 loans ($7.2M UPB) in Florida.
• First Half 2024: Through June 30, 2024, Fannie Mae sold 117,437 NPLs with a $21.1 billion total UPB.

Recent RPL Sales Activity (2024–2025)
Re-performing loans are generally sold in larger bulk transactions to investors like PIMCO and JP Morgan.

• Thirty-Fifth RPL Sale (August 2025): Announced August 12, 2025, featuring 3,044 loans ($559M UPB) won by Pacific Investment Management Company LLC (PIMCO), expected to close in October 2025.
• Thirty-Fourth RPL Sale (March 2025): Announced March 4, 2025, with 3,130 loans ($558.7M UPB), also won by PIMCO.
• Thirty-Third RPL Sale (October 2024): Announced October 8, 2024, featuring 8,678 loans ($1.42B UPB).

NPL and RPL Sale Characteristics

• Delinquency: Sold NPLs are generally severely delinquent, averaging 2.7 to 3.0 years of delinquency.
• Geographic Concentration: A high percentage of NPL sales (often ~40%) are concentrated in New Jersey, New York, and Florida.
• Borrower Protections: Buyers are required to offer loss mitigation options, such as loan modifications, before pursuing foreclosure.
• Outcome Data: NPLs on borrower-occupied homes have shown a ~47% rate of foreclosure avoidance, outperforming vacant home resolutions.

Key Participants

• Advisors: BofA Securities, Inc., First Financial Network, Inc., Citigroup Global Markets Inc..
• Winning Bidders (Recent): Residential Credit Opportunities IX/X, VRMTG ACQ, LLC (VWH Capital Management), PIMCO, JP Morgan Mortgage Acquisitions Corp.

FHFA publishes periodic reports tracking these sales, with the most recent data reflecting activity through December 31, 2024, showing a total of 173,571 NPLs sold by the Enterprises.

 

[Sadie]

Yes indeed. My experience was even though the fees were less than desired, the fact that you could go to the property when you wished, there were rarely any revisions and never a rush on turn times. Plus, there seemed to be a high percentage of tract homes. I doubt there will ever be an REO gravy train again.

Plus no chit chat with homeowners and they just wanted to know what the property was worth.

 

[Sadie]

Yes indeed. My experience was even though the fees were less than desired, the fact that you could go to the property when you wished, there were rarely any revisions and never a rush on turn times. Plus, there seemed to be a high percentage of tract homes. I doubt there will ever be an REO gravy train again.

everything is cyclical. Once the insanity of the 90% LTV waivers and "value acceptance" proves to be a horrible idea in practice, there will be some form of REO/Short sale work available. But who know how it will look and when it will happen

 

[Non Sequitur]

everything is cyclical. Once the insanity of the 90% LTV waivers and "value acceptance" proves to be a horrible idea in practice, there will be some form of REO/Short sale work available. But who know how it will look and when it will happen

They aren't going back to direct engagement, the shift is permanent.

 

[Bobby Bucks]

everything is cyclical. Once the insanity of the 90% LTV waivers and "value acceptance" proves to be a horrible idea in practice, there will be some form of REO/Short sale work available. But who know how it will look and when it will happen

I'm getting more FHA foreclosures, of course the reverse mortgage closeouts are always consistent. The effect of the waivers remains to be seen, but I suspect it will be another appeal to the taxpayer if it's significant.

I recall going to one of those Fannie REO breakfast meetings, where they didn't pay for our breakfasts or even our coffee. The subject of the scorecards was broached, everyone I talked to had similar scorecards to mine, ie. if it was low you didn't get assignments. We all had high scorecards. So the question was if Fannie REO has all the data on individual appraisers who have done hundreds of their REO appraisals, why would they not reward their competency in other areas of the Fannie lending machine by increasing order volume? We all agreed that there was nothing noble or ethical about Fannie, they had been rewarding the sleaziest mortgage brokers and their partners in crime "good appraisers" who were skilled at delivering reports that made their deals work. One more reason most appraisers have little no admiration for Fannie.

 

[Sadie]

They aren't going back to direct engagement, the shift is permanent.

I don't disagree, only saying that work will be there in some form

 

[Sadie]

I'm getting more FHA foreclosures, of course the reverse mortgage closeouts are always consistent. The effect of the waivers remains to be seen, but I suspect it will be another appeal to the taxpayer if it's significant.

I recall going to one of those Fannie REO breakfast meetings, where they didn't pay for our breakfasts or even our coffee. The subject of the scorecards was broached, everyone I talked to had similar scorecards to mine, ie. if it was low you didn't get assignments. We all had high scorecards. So the question was if Fannie REO has all the data on individual appraisers who have done hundreds of their REO appraisals, why would they not reward their competency in other areas of the Fannie lending machine by increasing order volume? We all agreed that there was nothing noble or ethical about Fannie, they had been rewarding the sleaziest mortgage brokers and their partners in crime "good appraisers" who were skilled at delivering reports that made their deals work. One more reason most appraisers have little no admiration for Fannie.

Fannie started out sourcing the reverse mortgage REOs to LRES a few years back. I have done 2 since then.

 

[alebrewer]

Fannie started out sourcing the reverse mortgage REOs to LRES a few years back. I have done 2 since then.

You sure Fannie does Reverses?