Has The Super Inventory of Non-Performing Loans Been Drained?

As our national training teams travel across the country, one of the most common questions we receive is “is there still a super inventory of non-performing loans?”

The question is normally asked for one of two reasons:

  1. The person learned about the opportunity in notes a few years back, but didn’t take action and is afraid he/she may have missed out
  2. The person is seeking discounted and readily available real estate inventory and is wondering if the real estate note inventory can provide that now and into the future

Using government and private company tracking sources, the answer is, “yes, we still have super inventories”. Using estimates from multiple sources, and only considering FDIC insured banks, Fannie Mae and Freddie Mac held loans; here is a breakdown of 90-day delinquent single-family home loans:

  • $147 Billion (unpaid balance) in December 2014
  • $134 Billion UPB in December 2015
  • $116 Billion UPB in December 2016

At an average attrition rate of $15 Billion, there is still a long way to go.

In February, Fannie Mae announced their first sale of 2017. This sale contains five loan pools with a total of over $1.76 billion in UPB. Expect to see more sale announcements by the end of the first quarter.