81 FR 30545 - Notice of Aged Delinquent Portfolio Loan Sale (ADPLS)

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 81, Issue 95 (May 17, 2016)

This notice announces HUD's intention to competitively sell certain unsubsidized single family mortgage loans, in a sealed bid sale offering called ADPLS, without Federal Housing Administration (FHA) mortgage insurance. This notice also generally describes the bidding process for the sale and certain persons who are ineligible to bid. This is the first ADPLS offering, and the sale will be held on May 18, 2016.

[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30545-30547]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11616]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5949-N-01]


Notice of Aged Delinquent Portfolio Loan Sale (ADPLS)

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Notice of sales of mortgage loans.

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SUMMARY: This notice announces HUD's intention to competitively sell 
certain unsubsidized single family mortgage loans, in a sealed bid sale 
offering called ADPLS, without Federal Housing Administration (FHA) 
mortgage insurance. This notice also generally describes the bidding 
process for the sale and certain persons who are ineligible to bid. 
This is the first ADPLS offering, and the sale will be held on May 18, 
2016.

DATES: For this sale action, the Bidder's Information Package (BIP) was 
made available to qualified bidders on April 11, 2016. Bids for the 
ADPLS sale will be accepted on the Bid Date of May 18, 2016 (Bid Date). 
HUD anticipates that award(s) will be made on or after May 18, 2016 
(the Award Date).

ADDRESSES: To become a qualified bidder and receive the BIP, 
prospective bidders must complete, execute, and submit a 
Confidentiality Agreement and a Qualification Statement acceptable to 
HUD. Both documents are available via the HUD Web site at: http://

[[Page 30546]]

www.hud.gov/sfloansales or via: http://www.verdiassetsales.com. Please 
execute electronically or mail and fax executed documents to Verdi 
Consulting, Inc.: Verdi Consulting, Inc., 8400 Westpark Drive, 4th 
Floor, McLean, VA 22102, Attention: HUD ADPLS Coordinator, Fax: 1-703-
584-7790.

FOR FURTHER INFORMATION CONTACT: John Lucey, Director, Asset Sales 
Office, Room 3136, Department of Housing and Urban Development, 451 
Seventh Street SW., Washington, DC 20410-8000; telephone 202-708-2625, 
extension 3927. Hearing- or speech-impaired individuals may call 202-
708-4594 (TTY). These are not toll-free numbers.

SUPPLEMENTARY INFORMATION: HUD announces its intention to sell in ADPLS 
certain unsubsidized non-performing mortgage loans (Mortgage Loans) 
secured by single family properties located throughout the United 
States. A listing of the Mortgage Loans is included in the due 
diligence materials made available to qualified bidders. The Mortgage 
Loans will be sold without FHA insurance and with servicing released. 
HUD will offer qualified bidders an opportunity to bid competitively on 
the Mortgage Loans.

The Bidding Process

    The BIP describes in detail the procedure for bidding in ADPLS. The 
BIP also includes a standardized non-negotiable Conveyance, Assignment 
and Assumption Agreement (CAA Agreement). Qualified bidders will be 
required to submit a deposit with their bid. Deposits are calculated 
based upon each qualified bidder's aggregate bid price.
    HUD will evaluate the bids submitted and determine the successful 
bid, in terms of the best value to HUD, in its sole and absolute 
discretion. If a qualified bidder is successful, the qualified bidder's 
deposit will be non-refundable and will be applied toward the purchase 
price. Deposits will be returned to unsuccessful bidders. For ADPLS, 
settlements are expected to take place on or about June 27, 2016, and 
July 29th, 2016.
    This notice provides some of the basic terms of sale. The CAA 
Agreement, which is included in the BIP, provides comprehensive 
contractual terms and conditions. To ensure a competitive bidding 
process, the terms of the bidding process and the CAA Agreement are not 
subject to negotiation.

Due Diligence Review

    The BIP describes how qualified bidders may access the due 
diligence materials remotely via a high-speed Internet connection.

Mortgage Loan Sale Policy

    HUD reserves the right to remove Mortgage Loans from ADPLS at any 
time prior to the Award Date. HUD also reserves the right to reject any 
and all bids, in whole or in part, and include any Mortgage Loans in a 
later sale. Deliveries of Mortgage Loans will occur in at least two 
settlements and the number of Mortgage Loans delivered will vary 
depending upon the number of Mortgage Loans the Participating Servicers 
have submitted for the payment of an FHA insurance claim. The 
Participating Servicers will not be able to submit claims on loans that 
are not included in the Mortgage Loan Portfolio set forth in the BIP.
    There can be no assurance that any Participating Servicer will 
deliver a minimum number of Mortgage Loans to HUD or that a minimum 
number of Mortgage Loans will be delivered to the Purchaser.
    The ADPLS Mortgage Loans are assigned to HUD pursuant to section 
204(a)(1)(A) of the National Housing Act as amended under Title VI of 
the Departments of Veterans Affairs and Housing and Urban Development 
and Independent Agencies Appropriations Act, 1999. The sale of the 
Mortgage Loans is pursuant to section 204(g) of the National Housing 
Act.

Mortgage Loan Sale Procedure

    HUD selected an open competitive whole-loan sale as the method to 
sell the Mortgage Loans for this specific sale transaction. For ADPLS, 
HUD has determined that this method of sale optimizes HUD's return on 
the sale of these Mortgage Loans, affords the greatest opportunity for 
all qualified bidders to bid on the Mortgage Loans, and provides the 
quickest and most efficient vehicle for HUD to dispose of the Mortgage 
Loans.

Bidder Ineligibility

    In order to bid in ADPLS as a qualified bidder, a prospective 
bidder must complete, execute and submit both a Confidentiality 
Agreement and a Qualification Statement acceptable to HUD. In the 
Qualification Statement, the prospective bidder must provide certain 
representations and warranties regarding (i) a prospective bidder, (ii) 
a prospective bidder's board of directors, (iii) a prospective bidder's 
direct parent, (iii) a prospective bidder's subsidiaries, and (iv) any 
related entity with which the prospective bidder shares a common 
officer, director, subcontractor or sub-contractor who has access to 
Confidential Information as defined in the Confidentiality Agreement or 
is involved in the formation of a bid transaction (``Related 
Entities''), and (v) a prospective bidder's repurchase lenders. The 
prospective bidder is ineligible to bid on any of the Mortgage Loans 
included in ADPLS if the prospective bidder, its Related Entities or 
its repurchase lenders, is any of the following, unless other 
exceptions apply as provided for the in Qualification Statement.
    1. An individual or entity that is currently debarred, suspended, 
or excluded from doing business with HUD pursuant to the Governmentwide 
Suspension and Debarment regulations at Title 2 of the Code of Federal 
Regulations, Parts 180 and 2424;
    2. An individual or entity that is currently suspended, debarred or 
otherwise restricted by any department or agency of the federal 
government or of a state government from doing business with such 
department or agency;
    3. An individual or entity that is currently debarred, suspended, 
or excluded from doing mortgage related business, including having a 
business license suspended, surrendered or revoked, by any federal, 
state or local government agency, division or department;
    4. An entity that has had its right to act as a Government National 
Mortgage Association (``Ginnie Mae'') issuer terminated and its 
interest in mortgages backing Ginnie Mae mortgage-backed securities 
extinguished by Ginnie Mae;
    5. An individual or entity that is in violation of its neighborhood 
stabilizing outcome obligations or post-sale reporting requirements 
under a Conveyance, Assignment and Assumption Agreement executed for a 
past sale;
    6. An employee of HUD's Office of Housing, a member of such 
employee's household, or an entity owned or controlled by any such 
employee or member of such an employee's household with household to be 
inclusive of the employee's father, mother, stepfather, stepmother, 
brother, sister, stepbrother, stepsister, son, daughter, stepson, 
stepdaughter, grandparent, grandson, granddaughter, father-in-law, 
mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-
law, first cousin, the spouse of any of the foregoing, and the 
employee's spouse;
    7. A contractor, subcontractor and/or consultant or advisor 
(including any

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agent, employee, partner, director, or principal of any of the 
foregoing) who performed services for or on behalf of HUD in connection 
with the sale;
    8. An individual or entity that knowingly acquired or will acquire 
prior to the sale date material non-public information, other than that 
information which is made available to Bidder by HUD pursuant to the 
terms of this Qualification Statement, about Mortgage Loans offered in 
the sale;
    9. An individual or entity that knowingly uses the services, 
directly or indirectly, of any person or entity ineligible under 1 
through 11 to assist in preparing any of its bids on the Mortgage 
Loans;
    10. An individual or entity which knowingly employs or uses the 
services of an employee of HUD's Office of Housing (other than in such 
employee's official capacity); or
    11. A Participating Servicer that contributed Mortgage Loans to a 
pool on which the Bidder is placing a bid.
    The Qualification Statement has additional representations and 
warranties which the prospective bidder must make, including but not 
limited to the representation and warranty that the prospective bidder 
or its Related Entities are not and will not knowingly use the 
services, directly or indirectly, of any person or entity that is, any 
of the following (and to the extent that any such individual or entity 
would prevent Bidder from making the following representations, such 
individual or entity has been removed from participation in all 
activities related to this sale and has no ability to influence or 
control individuals involved in formation of a bid for this sale):
    (1) An entity or individual is ineligible to bid on any included 
Mortgage Loan or on the pool containing such Mortgage Loan because it 
is an entity or individual that:
    (a) Serviced or held any Mortgage Loan at any time during the two-
year period prior to the bid, or
    (b) Is any principal of any entity or individual described in the 
preceding sentence;
    (c) Any employee or subcontractor of such entity or individual 
during that two-year period; or
    (d) Any entity or individual that employs or uses the services of 
any other entity or individual described in this paragraph in preparing 
its bid on such Mortgage Loan.

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding ADPLS, including, but not limited to, 
the identity of any successful qualified bidder and its bid price or 
bid percentage for any pool of loans or individual loan, upon the 
closing of the sale of all the Mortgage Loans. Even if HUD elects not 
to publicly disclose any information relating to ADPLS, HUD will 
disclose any information that HUD is obligated to disclose pursuant to 
the Freedom of Information Act and all regulations promulgated 
thereunder.

Scope of Notice

    This notice applies to ADPLS and does not establish HUD's policy 
for the sale of other mortgage loans.

    Dated: May 11, 2016.
Edward L. Golding,
Principal Deputy Assistant Secretary for Housing.
[FR Doc. 2016-11616 Filed 5-16-16; 8:45 am]
BILLING CODE 4210-67-P