by Sarah Jawaid, National Housing Conference
HUD announced it is accepting applications for the Distressed Asset Stabilization Program today to bid on a new pool of distressed single-family loans. This program is “an expansion of an FHA disposition program that sells pools of defaulted mortgages headed for foreclosure and provides the opportunity for the purchaser and borrower to avoid a costly foreclosure” according to HUD’s press release. Newark, Phoenix, Tampa and Chicago are the metropolitan areas where approximately 3,500 loans will be sold. Read more on HUD’s website.
HUD Secretary Shaun Donovan said, “The housing market has momentum not seen since before the crisis. But some metro areas are still under pressure and some FHA borrowers remain seriously behind on their loans and stand to lose their homes in a matter of months. As one step towards avoiding unnecessary foreclosures and further stabilizing communities, we are increasing the number of loans beyond our original goals of 5,000 per quarter to approximately 9,000 this quarter. Providing the opportunity for borrowers to potentially stay in their home under a new sustainable mortgage or other meaningful help not only benefits that homeowner but reduces the costs to FHA and ultimately benefits the entire community.”
Noteworthy in these distressed loan sales are neighborhood stabilization provisions limit buyers to those with proven experience in working out troubled home loans, managing distressed assets, and working to stabilize delinquent borrowers.