Fannie Mae Publishes a List of Multifamily Mortgage-Backed Securities Relating to the Morgan Indictment

July 17, 2018


On May 22, 2018, the U.S. Attorney's Office for the Western District of New York in Buffalo announced that a grand jury returned an indictment relating to mortgage loans that involve Robert Morgan and/or his management company, Morgan Management, LLC (each a "Morgan Party"), alleging that Frank Giacobbe and Patrick Ogiony (principals of mortgage broker Aurora Capital Advisors, LLC) and Kevin Morgan and Todd Morgan (employees of Morgan Management, LLC) conspired to provide lenders, servicers, and other investors with 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.

In the interest of providing transparency to investors in our Multifamily MBS and Multifamily REMIC securities (together, our "Guaranteed Multifamily Securities"), Fannie Mae provides a list of Guaranteed Multifamily Securities backed by one or more loans made to a Morgan Party or otherwise identified in the indictment (such loans "Morgan Loans"). Only one loan backing a Fannie Mae Guaranteed Multifamily Security is secured by a property identified in the indictment.

All Morgan Loans have been reported to us by their servicers as having been current as of June 2018. While the judicial process proceeds with respect to matters raised in the indictment, all MBS backed by Morgan Loans will be restricted from being included in re-securitization transactions issued by Fannie Mae. Except for the securities noted in the list, the listed securities are not backed by loans or mortgaged properties identified in the indictment. Fannie Mae is identifying these securities solely because of their relationship to a Morgan Party.

While Fannie Mae will advance timely payments of principal and interest on each Multifamily Guaranteed 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.