[Federal Register Volume 84, Number 87 (Monday, May 6, 2019)]
[Notices]
[Pages 19802-19803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09237]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6162-N-01]
Notice of HUD-Held Healthcare Loan Sale (HLS 2019-1)
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice of sale of six healthcare mortgage loans.
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SUMMARY: This notice announces HUD's intention to sell six unsubsidized
healthcare mortgage loans, without Federal Housing Administration (FHA)
insurance, in a competitive, sealed bid sale on or about June 12, 2019
(HLS 2019-1 or Loan Sale). This notice also describes generally the
bidding process for the sale and certain persons who are ineligible to
bid.
DATES: A Bidder's Information Package (BIP) will be made available on
or about May 15, 2019. Bids for the loans must be submitted on the bid
date, which is currently scheduled for June 12, 2019, between certain
specified hours. HUD anticipates that an award or awards will be made
on or before June 14, 2019. Closing is expected to take place between
June 24, 2019 and June 28, 2019.
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 website at
www.hud.gov/fhaloansales. Please fax or email as well as mail executed
original documents to: JS Watkins Realty Partners, LLC: JS Watkins
Realty Partners, LLC, c/o The Debt Exchange, 133 Federal Street, 10th
Floor, Boston, MA 02111, Attention: HLS 2019-1 Sale Coordinator, Fax:
1-978-967-8607, Email: [email protected].
FOR FURTHER INFORMATION CONTACT: John Lucey, Director, Asset Sales
Office, Room 3136, U.S. Department of Housing and Urban Development,
451 Seventh Street SW, Washington, DC 20410-8000; telephone 202-402-
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 HLS
2019-1, six (6) unsubsidized mortgage loans (Mortgage Loans),
consisting of five (5) first lien healthcare notes and one (1)
associated second lien note secured by assisted living facilities
located in various locations in Connecticut, Illinois, Maine, Ohio and
Pennsylvania. The Mortgage Loans are non-performing mortgage loans. The
listing of the Mortgage Loans is included in the BIP. The Mortgage
Loans will be sold without FHA insurance and with HUD servicing
released. HUD will offer qualified bidders an opportunity to bid
competitively on the Mortgage Loans. Qualified bidders may submit bids
on one or more of 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 or may bid on individual
loans.
The Qualification Statement describes the entities/individuals that
may be qualified to bid on the Mortgage Loans if they meet certain
requirements as detailed in the Qualification Statement. Some entities/
individuals must meet additional requirements in order to be qualified
to bid, including but not limited to:
Any mortgagee/servicer who originated one or more of the Mortgage
Loans; a mortgagor or an operator, with respect to any HUD insured or
subsidized mortgage loan (excluding the Mortgage Loans being offered in
the Loan Sale) who is currently in default, violation, or noncompliance
with one or more of HUD's requirements or business agreements; and a
limited partner, nonmanaging member, investor and/or shareholder who
owns a 1 percent or less interest in one or more of the Mortgage Loans,
or in the project securing one or more of the Mortgage Loans; and any
of the aforementioned entities'/individuals' principals, affiliates,
family members, and assigns.
Interested entities/individuals who fall into one of these
categories should review the Qualification Statement to determine
whether they are eligible to qualify to submit a bid on the Mortgage
Loans. Other entities/individuals not described herein may also be
restricted from bidding on the Mortgage Loans, as fully detailed in the
Qualification Statement.
The Bidding Process
The BIP describes in detail the procedure for bidding in HLS 2019-
1. The BIP also includes a standardized non-negotiable loan sale
agreement (Loan Sale Agreement).
As part of its bid, each bidder must submit a minimum deposit of
the greater of One Hundred Thousand Dollars ($100,000) or ten percent
(10%) of the aggregate bid prices for all of such Bidder's bids. In the
event the Bidder's aggregate bid is less than One Hundred Thousand
Dollars ($100,000), the minimum deposit shall be not less than fifty
percent (50%) of the Bidder's aggregate bid. HUD will evaluate the bids
submitted and determine the successful bid(s) 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, with any
amount beyond the
[[Page 19803]]
purchase price being returned to the bidder. Deposits will be returned
to unsuccessful bidders after notification to successful bidders on or
before June 17, 2019. Closings are expected to take place between June
24, 2019 and June 28, 2019.
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 Review
The BIP describes the due diligence process for reviewing loan
files in HLS 2019-1. Qualified bidders will be able to access loan
information remotely via a high-speed internet connection. Further
information on performing due diligence review of the Mortgage Loans is
provided in the BIP.
Mortgage Loan Sale Policy
HUD reserves the right to add Mortgage Loans to or delete Mortgage
Loans from HLS 2019-1 at any time prior to the Award Date. HUD also
reserves the right to reject any and all bids, in whole or in part,
without prejudice to HUD's right to include the Mortgage Loans in a
later sale. The Mortgage Loans will not be withdrawn after the award
date except as is specifically provided for in the Loan Sale Agreement.
This is 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 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
among those INELIGIBLE to bid on the Mortgage Loans being sold in HLS
2019-1:
1. A mortgagor or operator, including its principals, affiliates,
family members, and assigns, with respect to one or more of the
Mortgage Loans being offered in the Loan Sale, or an Active Shareholder
(as such term is defined in the Qualification Statement);
2. With respect to any other HUD multifamily and/or healthcare
mortgage loan not offered in the Loan Sale, any mortgagor or operator,
incuding any Related Party of either, that has failed to file financial
statements or is otherwise in default under such mortgage loan or is in
violation or noncompliance of any regulatory or business agreements
with HUD and that fails to cure such default or violation by no later
than June 1, 2019;
3. Any individual or entity that is debarred, suspended, or
excluded from doing business with HUD pursuant to Title 2 of the Code
of Federal Regulations, part 2424;
4. 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 HLS 2019-1;
5. Any employee of HUD, a member of such employee's family, or an
entity owned or controlled by any such employee or member of such an
employee's family;
6. Any individual or entity that uses the services, directly or
indirectly, of any person or entity ineligible under provisions (3)
through (5) above to assist in preparing its bid on any Mortgage Loan;
7. An FHA-approved mortgagee, including any principals, affiliates,
or assigns thereof, that has received FHA insurance benefits for one or
more of the Mortgage Loans being offered in the Loan Sale;
8. An FHA-approved mortgagee and/or loan servicer, including any
principals, affiliates, or assigns thereof, that originated one or more
of the Mortgage Loans being offered in the Loan Sale if the Mortgage
Loan defaulted within two years of origination and resulted in the
payment of an FHA insurance claim;
9. Any affiliate, principal or employee of any person or entity
that, within the two-year period prior to June 1, 2019, serviced any
Mortgage Loan or performed other services for or on behalf of HUD;
10. Any contractor or subcontractor to HUD that otherwise had
access to information concerning any Mortgage Loan on behalf of HUD or
provided services to any person or entity which, within the two-year
period prior to June 1, 2019, had access to information with respect to
the Mortgage Loan on behalf of HUD; and/or
11. Any employee, officer, director or any other person that
provides or will provide services to the prospective bidder with
respect to the Mortgage Loans during any warranty period established
for the Loan Sale, that serviced the Mortgage Loans or performed other
services for or on behalf of HUD or within the two-year period prior to
June 1, 2019, provided services to any person or entity which serviced,
performed services or otherwise had access to information with respect
to any Mortgage Loan for or on behalf of HUD.
Other entities/individuals not described herein may also be
restricted from bidding on the Mortgage Loans, as fully detailed in the
Qualification Statement.
The Qualification Statement provides further details pertaining to
eligibility requirements. Prospective bidders should carefully review
the Qualification Statement to determine whether they are eligible to
submit bids on the Mortgage Loans in HLS 2019-1.
Freedom of Information Act Requests
HUD reserves the right, in its sole and absolute discretion, to
disclose information regarding HLS 2019-1, including, but not limited
to, the identity of any successful bidder and its bid price or bid
percentage for the Mortgage Loans, upon the closing of the sale of the
Mortgage Loans. Even if HUD elects not to publicly disclose any
information relating to HLS 2019-1, 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 HLS 2019-1 and does not establish HUD's
policy for the sale of other mortgage loans.
Dated: April 25, 2019.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2019-09237 Filed 5-3-19; 8:45 am]
BILLING CODE 4210-67-P