[Federal Register: November 25, 2002 (Volume 67, Number 227)]
[Notices]
[Page 70615-70616]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25no02-79]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4639-N-03]
Notice of HUD-Held Multifamily and Healthcare Loan Sale (MHLS
2002-2)
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice of sale of mortgage loans.
-----------------------------------------------------------------------
SUMMARY: This notice announces HUD's intention to sell certain
unsubsidized multifamily and healthcare mortgage loans, without Federal
Housing Administration (FHA) insurance, in a competitive, sealed bid
sale (MHLS 2002-2). This notice also describes generally the bidding
process for the sale and certain persons who are ineligible to bid.
DATES: The Bidder Information Package (BIP) was available to qualified
bidders on October 31, 2002. Bids for the loans must be submitted on
the bid date that currently is scheduled for December 5, 2002. HUD
anticipates that awards will be made on or before December 9, 2002.
Closings are scheduled to take place between December 9, 2002 and
December 20, 2002.
ADDRESSES: To become a qualified bidder and receive the BIP,
prospective bidders must complete, execute and submit both a
Confidentiality Agreement and a Qualification Statement that are
acceptable to HUD. Both documents are available on the HUD Web site at
http://www.hud.gov/offices/hsg/comp/asset/mfam/mhls.cfm. The executed
documents must be mailed and faxed to Cushman & Wakefield at 1801 K
Street, NW., Suite 100-L, Washington, DC 20006, Attention: MHLS 2002-2
Sale Coordinator, Fax: (202) 293-9049.
The MHLS 2002-2 due diligence facility is located at 1500 K Street,
NW., Suite 625, Washington, DC 20005. The facility will be open from
October 28, 2002 through December 4, 2002.
FOR FURTHER INFORMATION CONTACT: Myrna Gordon, Deputy Director, Asset
Sales Office, Room 6266, Department of Housing and Urban Development,
451 Seventh Street, SW., Washington, DC 20410; telephone (202) 708-
2625, extension 3369 or Erin E. Moore, Legal Honors Intern, Office of
Insured Housing, Multifamily Division, Room 9230; telephone (202) 708-
0614, extension 5763. These are not toll-free numbers. Hearing or
speech-impaired individuals may call (800) 877-8339 (TTY).
SUPPLEMENTARY INFORMATION: HUD announces its intention to sell in MHLS
2002-2 certain unsubsidized mortgage loans (Mortgage Loans) secured by
multifamily and healthcare properties located throughout the United
States. The Mortgage Loans are comprised of performing and
nonperforming mortgage loans. A listing of the Mortgage Loans is
included in the BIP. The Mortgage Loans will be sold without FHA
insurance and, except for one Mortgage Loan, with servicing released.
HUD will offer qualified bidders an opportunity to bid competitively on
the Mortgage Loans.
The Mortgage Loans have been stratified for bidding purposes into 7
mortgage loan pools. Each pool contains 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. A mortgagor who is a qualified
bidder may submit an individual bid on its own Mortgage Loan.
The Bidding Process
The BIP describes in detail the procedure for bidding in MHLS 2002-
2. The BIP will also include a standardized nonnegotiable loan sale
agreement (Loan Sale Agreement) and a loan information CD that contains
a spreadsheet with selected attributes for each Mortgage Loan. As part
of its bid, each bidder must submit a deposit equal to the greater of
$100,000 or 10% of the bid price. HUD will evaluate the bids submitted
and determine the successful bids 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. HUD anticipates that the
awards will be made on or before December 9, 2002 (Award Date).
Deposits will be returned to unsuccessful bidders. Closings are
scheduled to occur between December 9, 2002 and December 20, 2002.
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
[[Page 70616]]
process and the Loan Sale Agreement are not subject to negotiation.
Due Diligence Facility
From October 28, 2002 through December 4, 2002, the due diligence
facility for MHLS 2002-2 will be open at 1500 K Street, NW., Suite 625,
Washington, DC. Qualified bidders will be able to access loan
information at the due diligence facility through computer workstations
connected to the due diligence system or remotely via a high speed
Internet connection. Qualified bidders may make appointments to visit
the facility or obtain user IDs and passwords for remote access by
contacting Owusu & Company, HUD's due diligence contractor, at (202)
638-8390.
Mortgage Loan Sale Policy
HUD reserves the right to add Mortgage Loans to or delete Mortgage
Loans from MHLS 2002-2 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 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 notice is to ensure compliance with the Multifamily Mortgage
Sale Regulations, 24 CFR 290.30. These regulations were promulgated in
consideration of the settlement that HUD entered into in Walker v.
Kemp, No. C 87 2628 RFP (N.D. Cal.). In settling that matter, HUD
agreed that prior to the sale of specific HUD held mortgage loans that
may have been receiving some form of subsidy at that time, HUD would
consider the effects of the sale upon several issues. These issues
include, but are not limited to, the availability of assisted housing
for tenants in those projects, the legal protections afforded to those
tenants and their rights, HUD's ability to monitor compliance of the
properties and the community need for low and moderate income housing.
By following the Multifamily Mortgage Sale Regulations, HUD is in
compliance with the terms of the settlement.
This is a sale of unsubsidized mortgage loans. Therefore, HUD has
determined that, pursuant to the Multifamily Mortgage Sale Regulations,
the Mortgage Loans will be sold without FHA insurance. Consistent with
HUD's policy as set forth in 24 CFR 290.35, HUD is unaware of any
Mortgage Loan that is delinquent and secures a project (1) for which
foreclosure appears unavoidable, and (2) in which very-low income
tenants reside who are not receiving housing assistance and who would
be likely to pay rent in excess of 30 percent of their adjusted monthly
income if HUD sold the Mortgage Loan. If HUD determines that any
Mortgage Loans meet these criteria, they will be removed from the sale.
Mortgage Loan Sale Procedure
HUD selected a competitive sale as the method to sell the Mortgage
Loans primarily to satisfy the Mortgage Sale Regulations. These
regulations require that, except under certain limited circumstances,
HUD-held multifamily mortgage loans must be sold on a competitive basis
(24 CFR 290.30). This method of sale optimizes HUD's return on the sale
of the 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 must complete,
execute and submit both a Confidentiality Agreement and a Qualification
Statement acceptable to HUD. The following individuals and entities are
ineligible to bid on any of the Mortgage Loans included in MHLS 2002-2:
(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 from doing business
with HUD pursuant to Title 24 of the Code of Federal Regulations, part
24;
(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 MHLS 2002-2;
(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 MHLS 2002-2;
(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 MHLS 2002-2;
(7) Any mortgagor that failed to submit to HUD the 1999, 2000 and
2001 audited financial statements for a project securing a Mortgage
Loan on or before November 8, 2002; and
(8) Any individual or entity and any Related Party (as such term is
defined in the Qualification Statement) that is a mortgagor in any of
HUD's multifamily housing programs 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 was cured on or
before November 15, 2002.
In addition, any entity or individual that served as a loan
servicer or performed other services for or on behalf of HUD at any
time during the 2-year period prior to October 1, 2002 with respect to
any Mortgage Loan is ineligible to bid on such Mortgage Loan. Also
ineligible to bid on any Mortgage Loan are: (a) Any affiliate or
principal of any entity or individual described in the preceding
sentence; (b) any employee or subcontractor of such entity or
individual during that 2-year period; or (c) 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 Mortgage Loan.
Prospective bidders should carefully review the Qualification Statement
to determine whether they are eligible to submit bids on the Mortgage
Loans in MHLS 2002-2.
Freedom of Information Act Requests
HUD reserves the right, in its sole and absolute discretion, to
disclose information regarding MHLS 2002-2, including, but not limited
to, the identity of any bidder and their bid price or bid percentage,
upon the completion of the sale. Even if HUD elects not to publicly
disclose any information relating to MHLS 2002-2, 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 MHLS 2002-2, and does not establish HUD's
policy for the sale of other mortgage loans.
Dated: November 18, 2002.
John C. Weicher,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 02-29800 Filed 11-22-02; 8:45 am]
BILLING CODE 4210-27-P