[Federal Register Volume 76, Number 83 (Friday, April 29, 2011)]
[Notices]
[Pages 24045-24047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10465]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5527-N-01]


Notice of HUD-Held Multifamily Loan Sale (MLS 2011-1)

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 mortgage loans, without Federal Housing 
Administration (FHA) insurance, in a competitive, sealed bid sale (MLS 
2011-1). This notice also describes generally the bidding process for 
the sale and certain persons who are ineligible to bid.

DATES: The Bidder's Information Package (BIP) was made available to 
qualified bidders on March 30, 2011. Submissions of bids for the loans 
were required by the bid date, which was April 27, 2011. Awards were 
made no later than April 28, 2011. Closings are expected to take place 
by May 6, 2011.

ADDRESSES: To become a qualified bidder and receive the BIP, 
prospective bidders must have completed, executed, and submitted a 
Confidentiality Agreement and a Qualification Statement acceptable to 
HUD. Both documents were available on the HUD Web site at http://www.hud.gov/fhaloansales. Executed documents were mailed and faxed 
documents to KDX Ventures: KDX Ventures, c/o The Debt Exchange, 133 
Federal Street, 10th Floor, Boston, MA 02111, Attention: HCLS 2011-1 
Sale Coordinator, Fax: 1-617-531-3499.

FOR FURTHER INFORMATION CONTACT: John Lucey, Deputy Director, Asset 
Sales Office, Room 3136, U.S. Department of Housing and Urban 
Development, 451

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Seventh Street, SW., Washington, DC 20410-8000; telephone 202-708-2625, 
extension 3927. 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 MLS 
2011-1 certain unsubsidized mortgage loans (Mortgage Loans) secured by 
multifamily properties located throughout the United States. The 
Mortgage Loans were comprised of non-performing mortgage loans. A final 
listing of the Mortgage Loans was included in the BIP. The Mortgage 
Loans were sold without FHA insurance and with servicing released. HUD 
offered qualified bidders an opportunity to bid competitively on the 
Mortgage Loans.
    The Mortgage Loans may be stratified for bidding purposes into 
several mortgage loan pools. Each pool contained Mortgage Loans that 
generally had similar performance, property type, geographic location, 
lien position and other characteristics. Qualified bidders could submit 
bids on one or more pools of Mortgage Loans or could bid on individual 
loans. A mortgagor who was a qualified bidder was permitted to submit 
an individual bid on its own Mortgage Loan. Interested Mortgagors were 
able to review the Qualification Statement to determine whether they 
were eligible to qualify to submit bids on one or more pools of 
Mortgage Loans or on individual loans in MLS 2011-1.

The Bidding Process

    The BIP described in detail the procedure for bidding in MLS 2011-
1. The BIP also included a standardized non-negotiable loan sale 
agreement (Loan Sale Agreement).
    As part of its bid, each bidder was required to submit a deposit 
equal to the greater of $100,000 or 10% of the bid price. In the event 
the bidder's aggregate bid was less than $100,000.00, the minimum 
deposit was not less than fifty percent (50%) of the bidder's aggregate 
bid. HUD evaluated the bids submitted and determined the successful 
bids in its sole and absolute discretion. If a bidder was successful, 
the bidder's deposit was non-refundable and was applied toward the 
purchase price. Deposits were returned to unsuccessful bidders. 
Closings are scheduled to occur by May 6, 2011.
    These were the essential terms of sale. The Loan Sale Agreement, 
which was included in the BIP, contained additional terms and details. 
To ensure a competitive bidding process, the terms of the bidding 
process and the Loan Sale Agreement were not subject to negotiation.

Due Diligence Review

    The BIP described the due diligence process for reviewing loan 
files in MLS 2011-1. Qualified bidders were able to access loan 
information remotely via a high-speed Internet connection.

Mortgage Loan Sale Policy

    HUD reserved the right to add Mortgage Loans to or delete Mortgage 
Loans from MLS 2011-1 at any time prior to the Award Date. HUD also 
reserved 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 was a sale of unsubsidized mortgage loans, pursuant to Section 
204(a) of the Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act of 1997, 12 
U.S.C. 1715z-11a(a).

Mortgage Loan Sale Procedure

    HUD selected a competitive sale as the method to sell the Mortgage 
Loans. 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 was required to 
complete, execute and submit both a Confidentiality Agreement and a 
Qualification Statement acceptable to HUD. The following individuals 
and entities were ineligible to bid on any of the Mortgage Loans 
included in MLS 2011-1:
    (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, and Title 2 of the Code of Federal 
Regulations, Part 2424;
    (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 MLS 2011-1;
    (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 MLS 2011-1;
    (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 MLS 2011-1;
    (7) Any affiliate, principal or employee of any person or entity 
that, within the two-year period prior to April 1, 2011, serviced any 
of the Mortgage Loans or performed other services for or on behalf of 
HUD;
    (8) Any contractor or subcontractor to HUD that otherwise had 
access to information concerning the Mortgage Loans on behalf of HUD or 
provided services to any person or entity which, within the two-year 
period prior to April 1, 2011, had access to information with respect 
to the Mortgage Loans on behalf of HUD;
    (9) Any employee, officer, director or any other person that 
provides or will provide services to the potential bidder with respect 
to such Mortgage Loans during any warranty period established for the 
Loan Sale, that (x) serviced any of the Mortgage Loans or performed 
other services for or on behalf of HUD or (y) within the two-year 
period prior to April 1, 2011, provided services to any person or 
entity which serviced, performed services or otherwise had access to 
information with respect to the Mortgage Loans for or on behalf of HUD;
    (10) Any mortgagor or operator that failed to submit to HUD on or 
before March 31, 2011, audited financial statements for fiscal years 
2007 through 2010 (or for such time as the project has been in 
operation or the prospective bidder served as operator, if less than 
three (3) years) for a project securing a Mortgage Loan;
    (11) 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 and/or healthcare 
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 January 31, 2011.

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    Prospective bidders were encouraged to carefully review the 
Qualification Statement to determine whether they were eligible to 
submit bids on the Mortgage Loans in MLS 2011-1.

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding MLS 2011-1, including, but not limited 
to, the identity of any successful bidder and its bid price or bid 
percentage for any pool of loans or individual loan, upon the closing 
of the sale of all the Mortgage Loans. Even if HUD elects not to 
publicly disclose any information relating to MLS 2011-1, 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 MLS 2011-1 and does not establish HUD's 
policy for the sale of other mortgage loans.

    Dated: April 22, 2011.
Robert C. Ryan,
Acting Assistant Secretary for Housing - Federal Housing--Commissioner.
[FR Doc. 2011-10465 Filed 4-28-11; 8:45 am]
BILLING CODE 4210-67-P