Fannie Mae to Begin Securitizing Reperforming Loans with Principal Forbearance

Fannie Mae has added four new prefixes (I5, I6, U5, and U6) that provide the flexibility to pool reperforming loans (RPL) with principal forbearance. These are loans for which the borrower has, in addition to a balance that is interest-bearing, an additional balance that is non-interest- bearing and is payable as a lump sum upon the maturity date of the mortgage loan or mortgage loan payoff. The lump sum payments related to such mortgage loans are not part of the related trust and are not payable to certificateholders.

Currently, we expect to issue $3 to 5 billion in RPL MBS under these new prefixes in 2021, and approximately the same amount in 2022. Note that this expectation is subject to many uncertainties and may change, perhaps substantially.

To learn more, check out our Basics of RPL MBS primer, Prefix Glossary, and MBS Prospectus.

For questions, please contact the Fannie Mae Investor Help Line at 1-800-232-6643, Option 3 or by e-mail.