Distressed Asset Stabilization Program

HUD Announces Changes to Distressed Asset Stabilization Program

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.

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 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.