[Federal Register Volume 67, Number 137 (Wednesday, July 17, 2002)]
[Notices]
[Pages 46996-46997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18113]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4639-N-02]


Notice of HUD-Held Multifamily and Healthcare Loan Sale (MHLS 
2002-1)

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

ACTION: Notice of sale of mortgage loans.

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SUMMARY: This notice announces HUD's intention to sell certain 
unsubsidized multifamily and healthcare mortgage loans, without Federal 
Housing Administration (FHA) insurance, in a competitive, sealed bid 
sale (MHLS 2002-1). This notice also describes generally the bidding 
process for the sale and certain persons who are ineligible to bid.

DATES: Bidder Information Packages are currently available to qualified 
bidders. Bids for the loans must be submitted on the bid date that 
currently is scheduled for July 30, 2002. HUD anticipates that awards 
will be made on or about August 1, 2002. Closings are expected to take 
place between August 8, 2002 and September 13, 2002.

ADDRESSES: To become a qualified bidder and receive access to the 
Bidder Information Package (BIP), prospective bidders must complete, 
execute and submit both a Confidentiality Agreement and a Qualification 
Statement that are acceptable to HUD. Both documents are available on 
the HUD website at www.hud.gov/offices/hsg/comp/assets/hsgloan.cfm. The 
executed documents must be mailed and faxed to Cushman & Wakefield at 
1801 K Street, NW., Suite 100-L, Washington, DC 20006, Attention: MHLS 
2002-1 Sale Coordinator, Fax: (202) 293-9049.
    The MHLS 2002-1 due diligence facility is located at 1500 K Street, 
NW., Suite 625, Washington, DC 20005. The facility will be open from 
June 17, 2002 through July 29, 2002.

FOR FURTHER INFORMATION CONTACT: Myrna Gordon, Deputy Director, Asset 
Sales Office, Room 6266, Department of Housing and Urban Development, 
451 Seventh Street, SW., Washington, DC 20410; telephone (202) 708-
2625, extension 3369. 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 MHLS 
2002-1 certain unsubsidized mortgage loans (Mortgage Loans) secured by 
multifamily and healthcare properties located throughout the United 
States. The Mortgage Loans are comprised of performing, subperforming 
and nonperforming mortgage loans. A final listing of the Mortgage Loans 
is included in the BIP. 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 Mortgage Loans have been stratified for bidding purposes into 
12 mortgage loan pools. Each pool contains Mortgage Loans that 
generally have similar performance, property type, geographic location, 
lien position and other characteristics. Qualified bidders may submit 
bids on one or more pools of Mortgage Loans. A mortgagor who is a 
qualified bidder may submit an individual bid on its own Mortgage Loan.

The Bidding Process

    The BIP describes in detail the procedure for bidding in MHLS 2002-
1. The BIP also includes a standardized nonnegotiable loan sale 
agreement (Loan Sale Agreement) and a loan information CD that contains 
a spreadsheet with selected attributes for each Mortgage Loan.
    As part of its bid, each bidder must submit a deposit equal to the 
greater of $100,000 or 5% of the bid price. HUD will evaluate the bids 
submitted and determine the successful bids in its sole and absolute 
discretion. If a bidder is successful, the bidder's deposit will be 
non-refundable and will be applied toward the purchase price. HUD 
anticipates that the awards will be made on August 1, 2002 (Award 
Date). Deposits will be returned to unsuccessful bidders. Closings are 
scheduled to occur between August 8, 2002 and September 13, 2002.
    These are the essential terms of sale. The Loan Sale Agreement, 
which is included in the BIP, contains additional terms and details. To 
ensure a competitive bidding process, the terms of the bidding process 
and the Loan Sale Agreement are not subject to negotiation.

Due Diligence Facility

    From June 17, 2002 through July 29, 2002, the due diligence 
facility for MHLS 2002-1 will be open at 1500 K Street, NW, Suite 625, 
Washington, DC. Qualified bidders will be able to access loan 
information at the due diligence facility through computer workstations 
connected to the due diligence system or remotely via a high speed 
Internet connection. Qualified bidders may make appointments to visit 
the facility or obtain user IDs and passwords for

[[Page 46997]]

remote access by contacting Owusu & Company, HUD's due diligence 
contractor, at (202) 638-8390.

Mortgage Loan Sale Policy

    HUD reserves the right to add Mortgage Loans to or delete Mortgage 
Loans from MHLS 2002-1 at any time prior to the Award Date. HUD also 
reserves the right to reject any and all bids, without prejudice to 
HUD's right to include any Mortgage Loans in a later sale. Mortgage 
Loans will not be withdrawn after the Award Date except as is 
specifically provided in the Loan Sale Agreement.
    This is a sale of unsubsidized mortgage loans. Additionally, there 
are no project-based Section 8 Rental Assistance Contracts on any of 
the mortgaged properties. Therefore, HUD has determined that, pursuant 
to the Multifamily Mortgage Sale Regulations, the Mortgage Loans will 
be sold without FHA insurance. Consistent with HUD's policy as set 
forth in 24 CFR 290.35, HUD 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. If HUD determines that any Mortgage Loans meet these 
criteria, they will be removed from the sale.

Mortgage Loan Sale Procedure

    HUD selected a competitive sale as the method to sell the Mortgage 
Loans primarily to satisfy the 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 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 Eligibility

    In order to bid in the sale, a prospective bidder must complete, 
execute and submit both a Confidentiality Agreement and a Qualification 
Statement acceptable to HUD and meet the requirements set forth in the 
BIP. Qualified bidders will receive a password that will permit them to 
access the BIP through the MHLS 2002-1 website.
    The following individuals and entities are ineligible to bid on any 
of the Mortgage Loans included in MHLS 2002-1:
    (1) Any employee of FHA or 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 FHA or HUD pursuant to Title 24 of the Code of Federal 
Regulations;
    (3) any contractor, subcontractor and/or consultant or advisor 
(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 MHLS 2002-1;
    (4) any individual who was a principal, partner, director, agent or 
employee of any entity or individual described in subparagraph 3 above, 
at any time during which the entity or individual performed services 
for or on behalf of HUD in connection with MHLS 2002-1;
    (5) any individual or entity that uses the services, directly or 
indirectly, of any person or entity ineligible under subparagraphs 1 
through 4 above to assist in preparing any of its bids on the Mortgage 
Loans;
    (6) any individual or entity which employs or uses the services of 
an employee of HUD (other than in such employee's official capacity) 
who is involved in MHLS 2002-1;
    (7) any mortgagor (or affiliate of a mortgagor) that failed to 
submit to HUD the 1999, 2000 and 2001 audited financial statements for 
a project securing a Mortgage Loan on or before May 31, 2002; and
    (8) any individual or entity and any Related Party (as such term is 
defined in the Qualification Statement) that is a mortgagor in any of 
HUD's multifamily housing programs that is in default under such 
mortgage loan or is in violation of any regulatory or business 
agreements with HUD, unless such default or violation is cured on or 
before June 28, 2002.
    In addition, any entity or individual that served as a loan 
servicer or performed other services for or on behalf of FHA or HUD at 
any time during the 2-year period prior to May 1, 2002 with respect to 
any Mortgage Loan is ineligible to bid on such Mortgage Loan. Also 
ineligible to bid on any Mortgage Loan are: (a) Any affiliate or 
principal of any entity or individual described in the preceding 
sentence; (b) any employee or subcontractor of such entity or 
individual during that 2-year period; 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.
    Prospective bidders should carefully review the Qualification 
Statement and the BIP to determine whether they are eligible to submit 
bids on the Mortgage Loans in MHLS 2002-1.

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding MHLS 2002-1, including, but not limited 
to, the identity of any bidder and their bid price or bid percentage, 
upon the completion of the sale. Even if HUD elects not to publicly 
disclose any information relating to MHLS 2002-1, HUD will have the 
right to 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 MHLS 2002-1, and does not establish HUD's 
policy for the sale of other mortgage loans.

    Dated: July 11, 2002.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 02-18113 Filed 7-16-02; 8:45 am]
BILLING CODE 4210-27-P