Fannie Mae Provides Updated Information Related to Defaulted Loans in Multifamily Mortgage-Backed Securities Impacted by the Morgan Indictment

June 24, 2019

To continue to provide transparency to investors in our Multifamily MBS and Multifamily REMIC securities (together, our “Guaranteed Multifamily Securities”), Fannie Mae is providing performance details on Guaranteed Multifamily Securities backed by one or more loans made to a Morgan Party (“Morgan Loans”). These loans are directly or indirectly connected to a mortgage fraud case as highlighted in this announcement, and an event of default has been declared on certain loans that were recently identified in a guilty plea by one of the parties to the case. 

Recently, Patrick Ogiony, a party to this case, pleaded guilty to conspiracy to commit bank fraud involving certain loans backing Fannie Mae Multifamily MBS. According to his guilty plea, Mr. Ogiony conspired with others to defraud several financial institutions that conduct business with Fannie Mae by providing false financial information in connection with the origination and servicing of loans in which a Morgan Party has or had an ownership interest in the related borrower, thereby triggering an event of default under the loan documents. The loans in question have been accelerated under the terms of the loan agreement and are expected to be repurchased from their respective securities in July 2019, or if not July 2019, as soon as reasonably possible thereafter. The defaulted loans have been updated on the list of Morgan Loans posted in the Product Information section on DUS Disclose. 

While the judicial process continues with respect to matters raised in the case, all MBS backed by Morgan Loans will continue to be restricted from being included in re-securitization transactions issued by Fannie Mae.

While Fannie Mae will advance timely payments of principal and interest on each Guaranteed Multifamily Security, there can be no assurance that the matters referenced in the indictment or any future actions against a Morgan Party will not result in an early prepayment of one or more Morgan Loans.  For prepayment risks associated with an investment in Guaranteed Multifamily Securities, investors should review “Risk Factors” in our Multifamily MBS Prospectuses and our Multifamily REMIC Prospectus.

For help with questions, market participants may contact the Fannie Mae Fixed-Income Investor Helpline at 1-800-2FANNIE or by e-mail.