To date, the investment bank has amassed almost two-thirds of the $9.6 billion in loans Fannie Mae has auctioned, spending approximately $4.5 billion on around 26,000 loans.
Goldman Sachs has purchased 59% of Fannie Mae-auctioned NPLs since it started selling in 2015 – a total of $5.7 billion in unpaid loan balances. It also dominated in the past two auctions in October and February, garnering a total of 15,000 loans worth $2.8 billion in unpaid balances.
“Buying non-performing loans and modifying them is a profitable business,” Laurie Goodman of the Housing Finance Policy Center at Urban Institute told the Journal.
The bank went back into the mortgage loan market after selling its mortgage-servicer in 2011. Goldman aimed at lessening its payments to the government through restructuring loans by lowering its interest rates, prolonging the loan or by debt-forgiveness.
Since the early 1990s, Goldman Sachs has been using its Dallas-based subsidiary MTGLQ Investors LP to trade credit. Short for “mortgage liquidation,” the bank has also been using MTGLQ to purchase Fannie Mae NPLs.
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Goldman Sachs snapped up nearly 8,000 non-performing loans from Fannie Mae Tuesday, amounting to $1.4 billion in unpaid balances. The purchase makes the bank the largest buyer of delinquent Fannie Mae loans over the past year and half, according to The Wall Street Journal.