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HUD Announces Residential Reverse Mortgage Sale

The Department of Housing and Urban Development (HUD) has announced a sale of residential reverse mortgage pools consisting of approximately 1,500 reverse mortgage notes secured by properties with a loan balance of approximately $330 million. According to a post in the Federal Register, the sale will consist of due and payable Secretary-held reverse mortgage loans. 

“The mortgage loans consist of first liens secured by single family, vacant residential properties, where all borrowers are deceased, and no borrower is survived by a nonborrowing spouse,” HUD states.

Qualified bidders can access the Bidder’s Information Package (BIP) beginning on on or about June 21, 2019, and bids sale will be accepted on the Bid Date of July 24, 2019. HUD anticipates that award(s) will be made on or about July 24, 2019.

Potential bidders can become qualified bidders and receive a BIP by completing both a Confidentiality Agreement and a Qualification Statement, available on the HUD website. 

This is the third sale of this type conducted by HUD. The second one took place in November 2018, secured by roughly 1,150 single-family vacant properties with a loan balance of $230 million, while the first sale took place in March 2018 secured by 650 notes with a loan balance of roughly $136 million.

Federal reverse mortgages have fallen, according to recent data. The origination of home equity conversion mortgage (HECM) loans fell 5.6% in June according to the latest data from Reverse Mortgage Insights (RMI). The data indicated that the fall, which put HECM endorsements within the range of 2,500 endorsements per month again, could indicate the new "default setting for the industry right now." Overall, 2,546 HECM endorsements were recorded in June 2019.

Among FHA approved HECM lenders that are tracked by RMI, the data indicated that despite an overall downward movement, three lenders saw a solid performance in June. They included High Tech Lending which increased its HECM originations by 68.6% to 59 loans; Fairway, which saw a 40% uptick with 98 loans; and FAR which grew 21.6% to 214 loans during the period.

Endorsements by the top 10 HECM lenders consisted of 1,905 loans of the total 2,546 loans endorsed in June.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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