On April 24, the U.S. Department of Housing and Urban Development changed its Distressed Asset Stabilization Program to require loan servicers to wait one-year before initiating a foreclosure action. Servicers will also be required to evaluate all borrowers for modifications under the Home Affordable Modification Program or other loss mitigation program. Release.
Distressed Asset Stabilization Program
Preliminary Results for HUD’s Notes Sales Under Distressed Asset Stabilization Program
On December 3, HUD announced preliminary results from the first loan sale under its expanded Distressed Asset Stabilization Program (DASP). The next sale, in the first quarter of 2013, will include approximately 10,000-15,000 loans, and will have targeted Neighborhood Stabilization Outcome pools located in certain metropolitan areas in Georgia, California, Florida, and Ohio. HUD Release.
HUD Accepting Applications to Purchase Troubled Mortgages
On July 13, HUD announced that applications may be submitted for the Distressed Asset Stabilization Program to purchase pools of severely distressed loans formerly insured by the FHA. Approximately 3,500 loans will be sold in four metropolitan areas: Chicago, IL; Newark, NJ; Phoenix, AZ; and Tampa, FL. HUD Release.
HUD Expansion of Sale of Troubled Mortgages
On June 8, HUD announced the establishment of the Distressed Asset Stabilization Program, an expansion of an FHA pilot program allowing private investors to purchase pools of mortgages headed for foreclosure, and charging investors with helping to bring the loans out of default. Servicers can place a mortgage loan into a pool if (i) the borrower is at least 6 months’ delinquent on its mortgage; (ii) the servicer has exhausted all steps in the FHA loss mitigation process; (iii) the servicer has initiated foreclosure proceedings; and (iv) the borrower is not in bankruptcy. Sales are scheduled to begin in September. HUD Release.