Fannie Mae to Securitize Reperforming Loans

Fannie Mae expects to begin securitizing performing loans that were previously delinquent, known as reperforming loans (RPLs) in the second half of 2016. The population will include loans that have been modified and are now performing as well as loans that have become current without a modification.

In support of this program, Fannie Mae will enhance its loan-level disclosures for this loan population and update its PoolTalk^® Glossary in order to provide continued transparency to investors. The loan level disclosure (LLD) file layout will contain over 30 additional attributes for RPLs, including updated credit scores at issuance, delinquency status, and modification details. Due to borrower privacy considerations, we will provide rounded unpaid principal balances for RPLs along with this enhanced disclosure. In addition, the format for all loan-level date fields will only provide month and year. A draft file layout, sample file, and glossary are available in this announcement.

Additionally, Fannie Mae will create 11 new prefixes related to the following RPL populations: Non-modified Loans (R series), Modified Loans (I series), and Modified Loans with a Step Rate (U series). These prefixes will not be TBA-eligible. Additional details on the prefixes can be found in the updated Prefix Glossary.

This early notification is designed to allow market participants to prepare their systems to accept the new data elements. While we expect to begin securitizing RPLs in the second half of 2016, the file layout may be effective at an earlier date in order to prepare for the program. As implementation moves closer, Fannie Mae will provide additional details about the program.

For any questions, please contact the Fannie Mae Investor Help Line at 1-800-232-6643, Option 2 or by e-mail.

Originally published: 04/25/16