[Federal Register Volume 81, Number 226 (Wednesday, November 23, 2016)]
[Notices]
[Pages 84610-84611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28244]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5993-N-01]


Notice of HUD Vacant Loan Sales (HVLS 2017-1)

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

ACTION: Notice of sales of reverse mortgage loans.

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SUMMARY: This notice announces HUD's intention to competitively offer 
multiple residential reverse mortgage pools consisting of approximately 
1,700 reverse mortgage notes secured by properties with an aggregate 
broker price opinion of approximately $220 million. The sale will 
consist of due and payable Secretary-held reverse mortgage loans. The 
mortgage loans consist of first liens secured by single family, vacant 
residential properties, where all borrowers are deceased and no 
borrower is survived by a non-borrowing spouse.
    This notice also generally describes the bidding process for the 
sale and certain persons who are ineligible to bid. This is the first 
sale offering of its type and the sale will be held on November 30, 
2016.

DATES: For this sale action, the Bidder's Information Package (BIP) is 
expected to be made available to qualified bidders on or about October 
28, 2016. Bids for the HVLS 2017-1 sale will be accepted on the Bid 
Date of November 30, 2016 (Bid Date). HUD anticipates that award(s) 
will be made on or about December 1, 2016 (the Award Date).

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 are available via the HUD Web site at: http://www.hud.gov/sfloansales or via: http://www.verdiassetsales.com. Please 
mail and fax executed documents to Verdi Consulting, Inc.: Verdi 
Consulting, Inc., 8400 Westpark Drive, 4th Floor, McLean, VA 22102, 
Attention: HUD SFLS Loan Sale Coordinator, Fax: 1-703-584-7790.

FOR FURTHER INFORMATION CONTACT: John Lucey, Director, Asset Sales 
Office, Room 3136, Department of Housing and Urban Development, 451 
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 HVLS 2017-1 due and payable 
Secretary-held reverse mortgage loans. The loans consist of first liens 
secured by single family, vacant residential properties, where all 
borrowers are deceased and no borrower is survived by a non-borrowing 
spouse.
    A listing of the mortgage loans is included in the due diligence 
materials made available to qualified bidders. 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 loans are expected to be offered in five regional 
pools.

The Bidding Process

    The BIP describes in detail the procedure for bidding in HVLS 2017-
1. The BIP also includes a standardized non-negotiable Conveyance, 
Assignment and Assumption Agreement for HVLS 2017-1 (CAA). Qualified 
bidders will be required to submit a deposit with their bid. Deposits 
are calculated based upon each qualified bidder's aggregate bid price.
    HUD will evaluate the bids submitted and determine the successful 
bid, in terms of the best value to HUD, in its sole and absolute 
discretion. If a qualified bidder is successful, the qualified bidder's 
deposit will be non-refundable and will be applied toward the purchase 
price. Deposits will be returned to unsuccessful bidders.
    This notice provides some of the basic terms of sale. The CAA, 
which is included in the BIP, provides comprehensive contractual terms 
and conditions. To ensure a competitive bidding process, the terms of 
the bidding process and the CAA are not subject to negotiation.

Due Diligence Review

    The BIP describes how qualified bidders may access the due 
diligence materials remotely via a high-speed Internet connection.

Mortgage Loan Sale Policy

    HUD reserves the right to remove mortgage loans from HVLS 2017-1 at 
any time prior to the Award Date. HUD also reserves the right to reject 
any and all bids, in whole or in part, and include any reverse mortgage 
loans in a later sale. Deliveries of mortgage loans will occur in 
conjunction with settlement and servicing transfer, approximately 30 to 
45 days after the Award Date.
    The HVLS 2017-1 reverse mortgage loans were insured by and were 
assigned to HUD pursuant to section 255 of the National Housing Act, as 
amended. The sale of the reverse mortgage loans is pursuant to section 
204(g) of the National Housing Act.

Mortgage Loan Sale Procedure

    HUD selected an open competitive whole-loan sale as the method to 
sell the mortgage loans for this specific sale transaction. For HVLS 
2017-1, HUD has determined that this method of sale optimizes HUD's 
return on the sale of these 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 Ineligibility

    In order to bid in HVLS 2017-1 as a qualified bidder, a prospective 
bidder must complete, execute and submit both a Confidentiality 
Agreement and a Qualification Statement acceptable to HUD. In the 
Qualification Statement, the prospective bidder must provide certain 
representations and warranties regarding the prospective bidder, 
including but not limited to (i) the prospective bidder's board of 
directors, (ii) the prospective bidder's direct parent, (iii) the 
prospective bidder's subsidiaries, (iv) any related entity with which 
the prospective bidder shares a common officer, director, subcontractor 
or sub-contractor who has access to Confidential Information as defined 
in the Confidentiality Agreement or is involved in the formation of a 
bid transaction (collectively the ``Related Entities''), and (v) the 
prospective bidder's repurchase lenders. The prospective bidder is 
ineligible to bid on any of the reverse mortgage loans included in HVLS 
2017-1 if the prospective bidder, its Related Entities or its 
repurchase lenders, is any of the following, unless other exceptions 
apply as provided for the in Qualification Statement.
    1. An individual or entity that is currently debarred, suspended, 
or excluded from doing business with

[[Page 84611]]

HUD pursuant to the Governmentwide Suspension and Debarment regulations 
at 2 CFR parts 180 and 2424;
    2. An individual or entity that is currently suspended, debarred or 
otherwise restricted by any department or agency of the federal 
government or of a state government from doing business with such 
department or agency;
    3. An individual or entity that is currently debarred, suspended, 
or excluded from doing mortgage related business, including having a 
business license suspended, surrendered or revoked, by any federal, 
state or local government agency, division or department;
    4. An entity that has had its right to act as a Government National 
Mortgage Association (``Ginnie Mae'') issuer terminated and its 
interest in mortgages backing Ginnie Mae mortgage-backed securities 
extinguished by Ginnie Mae;
    5. An individual or entity that is in violation of its neighborhood 
stabilizing outcome obligations or post-sale reporting requirements 
under a Conveyance, Assignment and Assumption Agreement executed for 
any previous mortgage loansale of HUD;
    6. An employee of HUD's Office of Housing, 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 with household to be 
inclusive of the employee's father, mother, stepfather, stepmother, 
brother, sister, stepbrother, stepsister, son, daughter, stepson, 
stepdaughter, grandparent, grandson, granddaughter, father-in-law, 
mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-
law, first cousin, the spouse of any of the foregoing, and the 
employee's spouse;
    7. A contractor, subcontractor and/or consultant or advisor 
(including any agent, employee, partner, director, or principal of any 
of the foregoing) who performed services for or on behalf of HUD in 
connection with the sale;
    8. An individual or entity that knowingly acquired or will acquire 
prior to the sale date material non-public information, other than that 
information which is made available to Bidder by HUD pursuant to the 
terms of this Qualification Statement, about mortgage loans offered in 
the sale;
    9. An individual or entity that knowingly uses the services, 
directly or indirectly, of any person or entity ineligible under 1 
through 10 to assist in preparing any of its bids on the mortgage 
loans;
    10. An individual or entity which knowingly employs or uses the 
services of an employee of HUD's Office of Housing (other than in such 
employee's official capacity); or
    The Qualification Statement has additional representations and 
warranties which the prospective bidder must make, including but not 
limited to the representation and warranty that the prospective bidder 
or its Related Entities are not and will not knowingly use the 
services, directly or indirectly, of any person or entity that is, any 
of the following (and to the extent that any such individual or entity 
would prevent the prospective bidder from making the following 
representations, such individual or entity has been removed from 
participation in all activities related to this sale and has no ability 
to influence or control individuals involved in formation of a bid for 
this sale):
    (1) An entity or individual is ineligible to bid on any included 
reverse mortgage loan or on the pool containing such reverse mortgage 
loan because it is an entity or individual that:
    (a) serviced or held such reverse mortgage loan at any time during 
the two-year period prior to the bid, or
    (b) is any principal of any entity or individual described in the 
preceding sentence;
    (c) any employee or subcontractor of such entity or individual 
during that two-year period; or
    (d) 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 reverse mortgage loan.

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding HVLS 2017-1, including, but not limited 
to, the identity of any successful qualified 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 SFLS 2017-1, HUD will 
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 HVLS 2017-1 and does not establish HUD's 
policy for the sale of other mortgage loans.

    Dated: November 16, 2016.
Edward L. Golding,
Principal Deputy Assistant Secretary for Housing.
[FR Doc. 2016-28244 Filed 11-22-16; 8:45 am]
 BILLING CODE 4210-67-P