[Federal Register Volume 68, Number 165 (Tuesday, August 26, 2003)]
[Notices]
[Pages 51298-51299]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21715]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4639-N-04]


Notice of HUD-Held Multifamily and Healthcare Loan Sale (MHLS 
2003-1)

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, Multifamily and Healthcare Loan Sale 2003-1 (MHLS 2003-1). This 
notice also describes generally the bidding process for the sale and 
certain persons who are ineligible to bid.

DATES: The Bidder Information Package (BIP) will be available to 
qualified bidders on or about August 15, 2003. Bids for the loans must 
be submitted on the bid date that currently is scheduled for September 
16, 2003. HUD anticipates that awards will be made on or before 
September 18, 2003. Closings are expected to take place between 
September 22 and September 30, 2003.

ADDRESSES: To become a qualified bidder and receive the 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 Web site at 
http://www.hud.gov/offices/hsg/comp/asset/hsgloan.cfm. The executed 
documents must be mailed and faxed to Owusu & Company at 1900 L Street, 
NW., Suite 300, Washington, DC 20036, Attention MHLS 2003-1 Sale 
Coordinator, Fax: (202) 223-7293.

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, or Erin E. Moore, Office of General Counsel, 
Insured Housing, Multifamily Division, Room 9230; telephone (202) 708-
0614, extension 5763. 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 
2003-1 certain unsubsidized mortgage loans (Mortgage Loans) secured by 
multifamily and healthcare properties located throughout the United 
States. The Mortgage Loans are comprised of performing and 
nonperforming mortgage loans. A final listing of the Mortgage Loans 
will be 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 will be stratified for bidding purposes into 
separate pools. Each pool will contain 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 will describe in detail the procedure for bidding in MHLS 
2003-1. The BIP also will include a standardized non-negotiable 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 10% 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 or before September 18, 
2003 (Award Date). Deposits will be returned to unsuccessful bidders. 
Closings are scheduled to occur between September 22 and September 30, 
2003.
    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 and Inquiries

    The due diligence contractor for MHLS 2003-1 is American Express 
Tax and Business Services, Inc. located at 1101 14th Street, NW., 14th 
Floor, Washington, DC 20005. For general questions regarding the Bidder 
Information Package, Loan Sale Agreement, loan information, bid 
structure, bid evaluation, sale procedures and mortgage loan due 
diligence, please contact Owusu & Company at (866) 565-0558.

Mortgage Loan Sale Policy

    HUD reserves the right to add Mortgage Loans to or delete Mortgage 
Loans from MHLS 2003-1 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. Pursuant to the 
Multifamily Mortgage Sale Regulations at 24 CFR part 290, the Mortgage 
Loans will be sold without FHA mortgage insurance. Consistent with 
HUD's policy as set forth in 24 CFR 290.35, HUD is unaware of any 
Mortgage Loan that is delinquent and secures a project (1) for which 
foreclosure appears unavoidable, and (2) in which very-low income 
tenants reside 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

[[Page 51299]]

HUD. The following individuals and entities are ineligible to bid on 
any of the Mortgage Loans included in MHLS 2003-1:
    (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 2003-1;
    (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 2003-1;
    (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 2003-1;
    (7) Any mortgagor (or affiliate of a mortgagor) that failed to 
submit to HUD all 1998 through 2002 audited financial statements for a 
project securing a Mortgage Loan on or before August 15, 2003; 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 August 15, 2003.
    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 September 1, 2003 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 to determine whether they are eligible to submit bids on the 
Mortgage Loans in MHLS 2003-1.

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding MHLS 2003-1, including, but not limited 
to, the identity of any bidder and their bid price or bid percentage 
for any pool of loans or individual loan within a pool of loans, upon 
the completion of the sale. Even if HUD elects not to publicly disclose 
any information relating to MHLS 2003-1, 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 2003-1, and does not establish HUD's 
policy for the sale of other mortgage loans.

    Dated: August 20, 2003.
John C. Weicher,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 03-21715 Filed 8-25-03; 8:45 am]
BILLING CODE 4210-27-P