[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
[[Page 24046]]
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