[Federal Register Volume 76, Number 150 (Thursday, August 4, 2011)]
[Notices]
[Pages 47226-47227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19736]


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

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5527-N-02]


Notice of HUD-Held Multifamily Loan Sale (MLS 2011-2)

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

ACTION: Notice of sale of mortgage loans.

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

SUMMARY: This notice announces HUD's sale of certain unsubsidized 
multifamily mortgage loans, without Federal Housing Administration 
(FHA) insurance, in a competitive, sealed bid sale (MLS 2011-2). This 
notice also describes generally the bidding process used for the sale 
and certain persons who were ineligible to bid. The Bidder's 
Information Package (BIP) was made available online to qualified 
bidders on June 29, 2011. Submission of bids for the loans were 
required on the bid date, which was August 3, 2011. Awards were made no 
later than August 4, 2011. Closings are expected to take place by 
August 19, 2011.

FOR FURTHER INFORMATION CONTACT: John Lucey, Deputy Director, Asset 
Sales Office, Room 3136, Department of Housing and Urban Development, 
451 7th Street, SW., Washington, DC 20410-8000; telephone number 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 the sale in MLS 2011-2 of 
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 the opportunity to bid competitively on the 
Mortgage Loans.
    The Mortgage Loans may be stratified for bidding purposes into 
several mortgage loan pools. Each pool may contain Mortgage Loans that 
generally have similar performance, property type, geographic location, 
lien position and other characteristics. Qualified bidders were 
permited to submit bids on one or more pools of Mortgage Loans or 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 advised 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 2011-2.

The Bidding Process

    The BIP described in detail the procedure for bidding in MLS 2011-
2. 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 will be applied toward the 
purchase price. Deposits were returned to unsuccessful bidders. 
Closings are scheduled to occur by August 19, 2011.
    These were the essential terms of sale. The Loan Sale Agreement, 
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 2011-2. Qualified bidders were able to access loan 
information remotely via a high-speed Internet connection. Further 
information on performing due diligence review of the Mortgage Loans 
was provided in the BIP.

Mortgage Loan Sale Policy

    HUD reserved the right to add Mortgage Loans to or delete Mortgage

[[Page 47227]]

Loans from MLS 2011-2 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 sale of unsubsidized mortgage loans was 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, afforded the greatest opportunity for all qualified 
bidders to bid on the Mortgage Loans, and provided the quickest and 
most efficient vehicle for HUD to dispose of the Mortgage Loans.

Bidder Eligibility

    In order to bid in the sale, prospective bidders were 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 2011-2:
    (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, 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 2011-2;
    (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 MLS 2011-2;
    (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 MLS 2011-2;
    (7) Any affiliate, principal or employee of any person or entity 
that, within the two-year period prior to August 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 August 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 August 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 June 30, 2011, audited financial statements for fiscal years 
2007 through 2010 (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 June 30, 2011;

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding MLS 2011-2, 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 2011-2, 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 applied to MLS 2011-2 and does not establish HUD's 
policy for the sale of other mortgage loans.

    Dated: July 29, 2011.
Carol J. Galante,
Acting Assistant Secretary for Housing, Federal Housing Commissioner.
[FR Doc. 2011-19736 Filed 8-3-11; 8:45 am]
BILLING CODE 4210-67-P