Reproductive loans are defined by Fannie Mae as mortgages that were previously in arrears but are working again because payments have become routine – with or without the use of a modification plan. Fannie Mae began selling RPL loans in October 2016 “to reduce the size of its retained mortgage portfolio”, according to the agency.
“There’s always an appetite for distressed parcels in the secondary market,” Rick Sharga, executive vice president of marketing for the real estate search firm RealtyTravs, said in a previous interview with HousingWire. “People look for stocks that they think have the risk-reward ratio to their liking.”
By comparison, during the same period in 2020, as the pandemic raged and government protections went into effect, a total of 57,235 RPLs were put on the sales block by Fannie Mae via four pool deals that had a total outstanding principal balance of $8.7 billion – or just over half of RPL sales by number of loans and $5.7 billion less than the overall 2021 value. In 2019, before the pandemic, Fannie sold nearly 104,000 replicable loans with a total value of $17.1 billion.
Fannie’s government-sponsored enterprise, Freddie Macfavors the securitization of RPL pools rather than selling the loans off its books.
“To date, Freddie Mac has … securitized over $73 billion of RPL,” reads an October 5, 2021 press release announcing Freddie’s price. final RPL agreement of the year — a $564 million offer backed by a pool of recurring loans. To date, Freddie has not announced any new RPL transactions for 2022.
Over the past three years, Freddie’s securitizations have trended downward from a total of seven deals in 2019 backed by RPL pools totaling nearly $13 billion to some six. offerings in 2020 backed by replicable loan pools worth a total of $8.2 billion. , Freddie Mac records show. Last year, the agency sponsored five securitization deals backed by RPL pools with a combined value of around $4.3 billion.