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HUD Archives: News Releases
13 BIDDERS WIN MULTIFAMILY MORTGAGES IN MIDWEST SALE
The Federal Housing Administration (FHA) today announced the names of the 13 successful bidders in its December 12-13 competitive auction of 107 non-performing multifamily mortgages. The mortgages, carrying an unpaid principal balance (UPB) of $873.2 million, were secured by unsubsidized apartment properties primarily in the Midwest region of the United States.
The auction generated proceeds of $762.7 million for the government -- or about 87.3 percent of the mortgages' UPB. The mortgages were sold without FHA insurance.
The auction was part of a series of sales FHA launched in 1994 to sell up to $11 billion in multifamily and single family mortgages insured by FHA. These properties came into the agency's inventory, in most cases, when borrowers defaulted.
The successful bidders in the Midwest sale were:
Condor One/CS First Boston
For each sale, HUD and the Office of Management and Budget determine the value of the mortgages were they to remain in the government's hands. Proceeds generated above this target can be applied to other initiatives or to reduce the federal deficit. Proceeds from the Midwest sale exceeded the value-to-government number by approximately $361.5 million. At the end of 1996, proceeds from FHA�s mortgage loan sales exceeded the value-to-government totals by more than $1.6 billion.
The Midwest sale drew 559 bids from 62 different bidders. Each mortgage was sold. As in previous sales this year, bidders in the December sale were permitted to submit bids on an unlimited number of individual mortgages and up to 20 bids on groups of assets that could consist of any combination of mortgages the bidder chose. Using a computer optimization model developed by Lucent Technologies Bell Laboratories, FHA was able to determine the bid combination providing the maximum return to the taxpayers. HUD's Financial Advisor for this sale was Cushman & Wakefield. Due diligence was performed by Tradewinds International.
Content Archived: January 20, 2009