In early October, we highlighted a large buyout event for FNMA pools serviced by Idaho HFA, the largest servicer of HFA loans. On October 28, FNMA officially announced that there were 544 base-pools with erroneous prepayments due to servicer reporting error. The announcement doesn’t mention the servicer of the affected pools, but when we look at pools that are single-servicer, every one of those pools is serviced by Idaho HFA.
FNMA reports the “September 2020 Impacted Principal Paydown” at $133MM. The September reported prepayment for FNMA Idaho HFA pools was 43 CPR on a total of just over $6B UPB. If we add back the principal from the impacted paydown, the speed should have been 26 CPR, which is closer to the Freddie-reported 25 CPR.
FNMA provides an announcement here and list of pools here. According to the announcement, FNMA will not be reversing the buyout but instead recommends that affected investors start a claims process. We note that Idaho HFA prepayment speeds will continue to show these erroneous buyouts in the October factor date.
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