Bloomberg: HUD Fails to Sell $450 Million of Non-Performing Mortgages

For the first time, the Department of Housing and Urban Development (HUD) failed to sell some of the non-performing loans it acquired following the aftermath of the housing market crash, Bloomberg reports

HUD deemed bids on about $450 million of non-performing loans too low to accept at an October 30 auction, according to four sources close to the issue cited by Bloomberg.

The federal agency sought to offload a total of $1.7 billion in loans, with the mortgages approximating $450 million comprising two pools that had the highest debt relative to underlying properties. 

Advertisement

Bloomberg suggests that the sales are an attempt by HUD to stem losses at the Federal Housing Administration (FHA) as well as pursing its mission of averting foreclosures on the defaulted properties.

The mortgage sales are being conducted through DebtX, an online loan-auction service run by Debt Exchange Inc.

A condition of HUD’s offerings include requiring investors to agree to buy all of the loans in the pools for which they are bidding on an “as-is basis,” rather than allowing loans to be removed, or “kicked out,” after relying on upfront due diligence from providers they do not choose, Bloomberg notes.

About 24,000 loans are being offered over HUD’s October and December auctions, as well as an additional 5,000 from cities like Atlanta, Baltimore, Washington, Indianapolis, Las Vegas and California.

The current $5 billion round of auctions of non-performing loans insured by FHA resumes December 10. Since 2010, HUD has offloaded $8.1 billion in loans.

Read the Bloomberg article.

Written by Jason Oliva

string(112) "https://reversemortgagedaily.com/2013/11/14/bloomberg-hud-fails-to-sell-450-million-of-non-performing-mortgages/"

Share your opinion