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HUD: Nearly Half of Loans in Distressed Asset Stabilization Program Have Been Resolved

HUD distressed asset stabilization programThe U.S. Department of Housing and Urban Development (HUD) announced that nearly 50 percent of the 79,029 single-family residential loans sold through its Single-Family Loan Sale (SFLS) Program have been resolved and are no longer non-performing, according to the Department's update on its SFLS Program released on Friday.

The majority of those loans sold, about 97 percent, were sold through HUD's Distressed Asset Stabilization Program (DASP), which began in 2012. HUD has conducted 13 distressed loan sales since beginning the SFLS program in 2010, seven of which have been conducted since DASP began in 2012. About 75,ooo loans have been sold as part of DASP in regional or national pools, totaling  more than $12.6 billion in unpaid balance, according to HUD's report.

Since HUD began SFLS in 2010, it has resolved 38,385 out of the slightly more than 79,000 non-performing loans through various means as of February 2015, a total of 49 percent. Out of those resolved loans, 16,706 of the borrowers (21 percent of the non-performing total and 43.5 percent of the resolved loans) avoided foreclosure through either paying the loans current, forbearance agreements, paying the loan in full, a short sale, a third-party sale, or a deed-in-lieu of foreclosure.

The most common resolution for delinquent HUD loans in the SLFS Program was borrowers bringing the loan up to re-performing status through timely payments, with 6,249.

About 20 percent, or 16,031, of the non-performing loans were resolved through foreclosure, and 254 of the properties were held for rental. Nearly 7 percent (5,394) were resolved through whole loan sales.

In addition to the national and regional pools, HUD has sold 20,784 non-performing loans as part of its Neighborhood Stabilization Outcome (NSO) program, which was introduced at the same time as DASP in 2012 in order to target more specific areas. The NSO program has resulted in six sales of distressed loans totaling about 3.7 billion in unpaid balance. HUD has sold 98,007 distressed loans for a total of approximately $16.7 billion in unpaid balance when NSO loan saies are combined with national and regional loan sales.

According to HUD, the Department began DASP sales in 2012 as part of a “broader effort to reduce losses and increase recoveries to the Mutual Mortgage Insurance Fund,” which is currently at 0.41 percent, less than a quarter of its required level of 2 percent.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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