[Federal Register Volume 65, Number 241 (Thursday, December 14, 2000)]
[Notices]
[Pages 78181-78182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31807]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4639-N-01]


Notice of HUD-Held Multifamily and Healthcare Loan Sale; 2000-1 
Sale

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

ACTION: Notice of sale of mortgage loans.

-----------------------------------------------------------------------

SUMMARY: This notice announces the Department's intention to sell 
certain unsubsidized multifamily and healthcare mortgage loans, without 
Federal Housing Administration (FHA) insurance, in a competitive, 
sealed-bid sale. This notice also describes generally the bidding 
process to be used in the Multifamily Healthcare Loan Sale 2000-1 
(Sale).

DATES: Bid Packages are currently available. It is anticipated that HUD 
will be accepting bids for the loans in the Sale on December 19, 2000.

ADDRESSES: To become a Qualified Bidder and receive a Bid Package, 
prospective bidders must submit a completed Confidentiality Agreement 
and Qualification Statement. Both documents are available on the FHA 
Multifamily and Healthcare Loan Sale Page at: www.hud.gov/fha/comp/asset/mfam/mhls.html. The executed Confidentiality Agreement and 
Qualification Statement must be mailed and faxed to: Secured Capital 
Corp, 11150 Santa Monica Blvd., Suite 1400, Los Angeles, CA 90025, 
ATTN: R. Mark Williams, FHA MHLS 2000-1, Facsimile: 310-477-3436. 
Prospective bidders may make special arrangements to receive the Bid 
Package and other bid materials through expedited delivery by calling 
Secured Capital Corp at 310-477-9600.
    The Due Diligence Facility is scheduled to be open from November 6, 
2000, through December 17, 2000. Qualified Bidders will be able to 
review the imaged copies of the loan files and other information, to 
the extent available (Due Diligence Investor Package and Asset Review 
Files) via computer workstations at the Due Diligence Facility. 
Qualified Bidders are required to schedule an appointment and post a 
refundable $500 deposit before they may visit the facility. 
Appointments may be scheduled by contacting Daniel H. Lisser at (212) 
319-8600 of Secured Capital Corp. Imaged copies of the Due Diligence 
Investor Package and Asset Review Files on CDs will also be available 
for purchase by Qualified Bidders in the manner described in the Bid 
Package.

FOR FURTHER INFORMATION CONTACT: Office of the Housing-FHA Comptroller, 
Asset Sales Office, Room 6266, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410; telephone 
(202) 708-2625.

SUPPLEMENTARY INFORMATION: The Department announces its intention to 
sell in the Sale certain unsubsidized mortgage loans (Mortgage Loans) 
secured by multifamily and healthcare properties located throughout the 
United States. A final listing of the specific Mortgage Loans included 
in the Sale will be contained in a supplement to the Bid Package. The 
Mortgage Loans will be sold without FHA insurance. The Department will 
offer Qualified Bidders an opportunity to bid competitively on the 
Mortgage Loans.
    The Mortgage Loans have been pooled for bidding purposes into 27 
Mortgage Loan Pools. Each Mortgage Loan Pool contains Mortgage Loans 
that generally have similar performance, property type, geographic 
location, lien position and other characteristics. Qualified Bidders 
will be permitted to submit bids for any one or more of the individual 
Mortgage Loans and any one or more pools of Mortgage Loans. Bidders 
will be permitted to submit all-or-none pool bids and will also be 
permitted to establish floors (minimums) and a ceiling (a maximum) with 
respect to pool bids. The Department will evaluate the bids submitted 
and use its sole discretion to determine successful bids.

The Bidding Process

    The Department will describe in detail the procedure for 
participating in the Sale in a Bid Package, which will include a 
standardized nonnegotiable loan sale agreement (Loan Sale Agreement), 
as well as certain information concerning each of the Mortgage Loans, 
such as the unpaid principal balance and interest rate. Bid Packages 
are currently available. Qualified Bidders may receive a Bid Package by 
contacting Secured Capital as specified in the ADDRESSES section, 
above, of this notice. Qualified Bidders will be required to submit a 
deposit at the time of bidding as detailed in the Bid Package. HUD 
anticipates that closings will be held during the first two weeks of 
January 2001. If a successful bidder fails to close in accordance with 
the terms of the Loan Sale Agreement, the Department shall be entitled 
to retain as liquidated damages the deposit received from such bidder.
    TO ENSURE A COMPETITIVE BIDDING PROCESS, THE TERMS OF SALE ARE NOT 
SUBJECT TO NEGOTIATION.

Due Diligence Facility

    During the approximately four-week period prior to the Bid Date, a 
Due Diligence Facility will be open to Qualified Bidders. At the Due 
Diligence Facility, the Department will provide access to computer 
workstations at which Qualified Bidders may view available information 
about the Mortgage Loans, including environmental and title reports and 
market data. The Department reserves the right to charge a reasonable 
fee to recover its costs in duplicating and forwarding any information 
requested by a Qualified Bidder. Qualified Bidders are required to post 
a refundable deposit of $500 towards such costs prior to visiting the 
Due Diligence Facility. Appointments to visit the Due Diligence 
Facility may be scheduled by contacting Daniel H. Lisser at (212) 319-
8600 of Secured Capital Corp.

Mortgage Sale Policy

    The Department reserves the right to remove Mortgage Loans from the 
Sale at any time prior to the Award Date. The Department also reserves 
the right, in its sole discretion, and for any reason

[[Page 78182]]

whatsoever, to terminate the Sale, in whole or in part, prior to the 
Award Date and to reject any and all bids, without prejudice to the 
Department's right to include any Mortgage Loans in a later sale.
    The regulations applicable to the sale of the HUD-held multifamily 
mortgages (Multifamily Mortgage Sale Regulations) (24 CFR 290.30 et 
seq.) were promulgated in consideration of the settlement that the 
Department entered into in Walker v. Kemp, No. C 87 2628 (RFP) (N.D. 
Cal.). In settling the matter, the Department agreed, with regard to 
specific mortgage loans, to consider, prior to the sale of such 
mortgage loans, certain factors pertaining to the protection of tenant 
interests in projects securing subsidized and unsubsidized HUD-held 
mortgage loans.
    This is a sale of unsubsidized mortgage loans. Therefore, the 
Department has determined that, pursuant to the Multifamily Mortgage 
Sale Regulations, the Mortgage Loans may be sold without FHA insurance. 
Consistent with HUD's policy as set forth in 24 CFR 290.35(b), the 
Department knows of no Mortgage Loan that is delinquent and secures a 
project (1) for which foreclosure appears unavoidable, and (2) in which 
reside very low-income tenants who are not receiving housing assistance 
and who would be likely to pay rent in excess of 30 percent of their 
adjusted monthly income if HUD sold the Mortgage Loan (24 CFR 
290.35(b)). If the Department determines that any Mortgage Loans meet 
these criteria, they will be removed from the Sale.

Mortgage Loan Sale Procedure

    The Department selected a competitive sale as the method to sell 
the Mortgage Loans primarily to satisfy the Multifamily Mortgage Sale 
Regulations. These regulations require that, except under certain 
limited circumstances, HUD-held multifamily mortgage loans must be sold 
on a competitive basis (24 CFR 290.30). This method of sale optimizes 
the Department'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 the Department to dispose of the Mortgage Loans.

Replacement of Reserve Funds

    Depending upon the Mortgage Loan, amounts in reserve for 
replacement accounts will, in HUD's discretion, be refunded to the 
Mortgagor, applied against the Mortgagor's outstanding arrearage, or 
credited against the amounts due by the Successful Bidder.

Timely Bids and Deposits

    Each Qualified Bidder assumes all risks of loss relating to its 
failure to deliver, or cause to be delivered, on a timely basis and in 
the manner specified by the Department, its bid form, deposit and Loan 
Sale Agreement required to be submitted by the bidder.

Ties for High Bidder

    In the event there is a tie for a high bid, the Department, through 
its transaction specialist, will contact the Qualified Bidders who 
submitted the tie bids and afford each of them an opportunity to submit 
a best and final bid. The successful bidder will be the one with the 
highest bid.

Status of Mortgage Loans

    The Mortgage Loans contained within the Sale are comprised of 
performing, subperforming and nonperforming loans.

Ineligible Bidders

    The following individuals and entities (either alone or in 
combination with others) are ineligible to bid on any one or 
combination of the Mortgage Loans included in the Sale:
    (1) Any employee of HUD, 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;
    (2) Any individual or entity that is debarred from doing business 
with HUD pursuant to 24 CFR part 24;
    (3) Any contractor, subcontractor and/or consultant or adviser 
(including any agent, employee, partner, director, principal or 
affiliate of any of the foregoing) who performed services for, or on 
behalf of, HUD in connection with the Sale;
    (4) Any individual that was a principal, partner, director, agent 
or employee of any entity or individual described in paragraph (3) 
above at any time during which the entity or individual performed 
services for or on behalf of HUD in connection with the Sale;
    (5) Any individual or entity that uses the services, directly or 
indirectly, of any person or entity ineligible under paragraphs (1) 
through (4) above, to assist in preparing its bid on any Mortgage 
Loan(s); and
    (6) Any individual or entity that employs or uses the services of 
an employee of HUD (other than in such employee's official capacity) 
who is involved in the Sale.
    (7) Mortgagors who have not submitted their project's audited 
financial statements for fiscal years 1998 and 1999.
    Furthermore, any entity or individual that served as a loan 
servicer or performed other services for or on behalf of HUD at any 
time during the two-year period prior to October 23, 2000 with respect 
to any Mortgage Loan(s) is ineligible to bid on such Mortgage Loan(s) 
or provide services to Bidder with respect to such Mortgage Loans 
during the Warranty Period established for the Sale. The following also 
are ineligible to bid on such Mortgage Loan(s): (a) Any employee, 
affiliate or principal of such entity or individual described in the 
preceding sentence, (b) any contractor, subcontractor or other person 
or entity which, during that two-year period prior to October 23, 2000, 
either had access to information concerning or provided any services 
with respect to any such Mortgage Loan(s) or provided services to such 
person or entity with respect to such Mortgage Loans, or (c) 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(s).

Freedom of Information Requests

    The Department reserves the right, in its sole and absolute 
discretion, to disclose information regarding the Sale, including, but 
not limited to, the identity of bidders and the bid price or bid 
percentage, upon the consummation of the Sale. Even if the Department 
elects not to publicly disclose any information relating to the Sale, 
the Department will have the right to disclose any information the 
Department is obligated to disclose pursuant to the Freedom of 
Information Act and all regulations promulgated thereunder.

Scope of Notice

    This notice applies to the Sale, and does not establish the 
Department's policy for the sale of any other mortgage loans.

    Dated: December 8, 2000.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 00-31807 Filed 12-13-00; 8:45 am]
BILLING CODE 4210-27-P