[Federal Register Volume 69, Number 164 (Wednesday, August 25, 2004)]
[Notices]
[Pages 52301-52303]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19382]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4639-N-06]


Notice of HUD-Held Multifamily and Healthcare Loan Sale (MHLS 
2004-2)

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 2004-2). 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 23, 2004. Bids for the loans must 
be submitted on the bid date, which is currently scheduled for 
September 15, 2004. HUD anticipates that awards will be made on or 
before September 17, 2004. Closings are expected to take place on 
September 22, 2004.

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 will be available on the HUD Web site at http://www.hud.gov/offices/hsg/comp/asset/mfam/mhls.cfm. The executed documents must be 
mailed and faxed to KEMA Advisors, Inc., HUD's transaction specialist 
for the sale, at 1400 K Street, NW., Suite 950, Attention: MHLS 2004-2 
Sale Coordinator, fax: (202) 464-3047.

FOR FURTHER INFORMATION CONTACT: Myrna Gordon, Deputy Director, Asset 
Sales Office, Room 3136, Department of Housing and Urban Development, 
451

[[Page 52302]]

Seventh Street, SW., Washington, DC 20410; telephone (202) 708-2625, 
extension 3369 or Gregory Bolton, Senior Attorney, Office of Insured 
Housing, Multifamily Division, Room 9230; telephone (202) 708-0614, 
extension 5245. 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 
2004-2 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 
several mortgage loan 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 
2004-2. The BIP will also include 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 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. Deposits 
will be returned to unsuccessful bidders. Closings are scheduled to 
occur on September 22, 2004.
    These are the essential terms of sale. The Loan Sale Agreement, 
which will be included in the BIP, will contain 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 Review

    The BIP will describe the due diligence process for reviewing loan 
files in MHLS 2004-2. Qualified bidders will be able to access loan 
information at a due diligence facility or remotely via a high speed 
Internet connection. Further information on performing due diligence 
review of the Mortgage Loans will be provided in the BIP.

Mortgage Loan Sale Policy

    HUD reserves the right to add Mortgage Loans to or delete Mortgage 
Loans from MHLS 2004-2 at any time prior to the Award Date. HUD also 
reserves the right to reject any and all bids, in whole or in part, 
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, 24 CFR 290.30 et seq., the 
Mortgage Loans will be sold without FHA 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. 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. The following individuals and entities are 
ineligible to bid on any of the Mortgage Loans included in MHLS 2004-2:
    (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, suspended, or 
excluded from doing business with HUD pursuant to title 24 of the Code 
of Federal Regulations, part 24;
    (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 2004-2;
    (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 2004-2;
    (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 2004-2;
    (7) Any mortgagor (or affiliate of a mortgagor) that failed to 
submit to HUD on or before August 31, 2004, audited financial 
statements for 1998 through 2003 for a project securing a Mortgage 
Loan; and
    (8) Any individual or entity and any Related Party (as such term is 
defined in the Qualification Statement) of such individual or entity 
that is a mortgagor in any of HUD's multifamily housing programs and 
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 31, 2004.
    In addition, 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 2-year period prior to August 31, 2004, 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.

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    Prospective bidders should carefully review the Qualification 
Statement to determine whether they are eligible to submit bids on the 
Mortgage Loans in MHLS 2004-2.

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding MHLS 2004-2, 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 2004-2, 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 2004-2, and does not establish HUD's 
policy for the sale of other mortgage loans.

    Dated: August 18, 2004.
Sean Cassidy,
General Deputy Assistant Secretary for Housing.
[FR Doc. 04-19382 Filed 8-24-04; 8:45 am]
BILLING CODE 4210-27-P