The Department of Housing and Urban Development will sell 20,000 distressed loans this summer through its Distressed Asset Stabilization Program in an effort to help shore up the Federal Housing Administration insurance fund.
In addition to bolstering the fund’s recovery, the sale of the distressed loans will help reduce shadow inventory and should support overall housing stabilization in some of the areas hit hardest by the housing crisis, HUD said Friday.
The agency plans to sell 15,000 loans at auction on June 26 through national pools, with the remaining 5,000 loans for sale through auction on July 10. The action is part of a larger initiative to sell 40,000 loans this year.
“We’ve seen a tremendous response to our note sales which allow us to support particular areas of our country hard-hit by foreclosures while improving outcomes for FHA,” said FHA Commissioner Carol Galante. “These auctions allow us to continue stabilizing hard-hit housing markets and to improve FHA’s overall financial position at the same time.”
Among the markets targeted will be Los Angeles, Chicago, Southern Ohio and North Carolina.
Written by Elizabeth Ecker
