HUD  has announced the latest sale  in the Distressed Asset Stabilization Program (DASP ), Single Family Loan Sale 2016-1 (SFLS 2016-1) consisting of one offering date with National Pools and Neighborhood Stabilization Outcome (NSO) Pools offered on November 18, 2015.
Like the previous DASP sale executed in April, HUD's NSO offerings will include one pool for which only non-profit bidders or units of local government are eligible to bid. Unlike the National Pools that include mortgage loans spread out across the nation, NSO pools are concentrated in one geographic area and are aimed at achieving neighborhood stabilization outcomes, HUD said.
The latest sale will include distressed loans with significantly long periods of delinquency, according to HUD. All bidders wanting to participate must complete the confidentiality and qualification procedures.
On September 30, Sen. Elizabeth Warren and Rep. Mike Capuano, both Democrats from Massachusetts, and representatives from several non-profit organizations and other local government leaders met with government housing officials  to discuss distressed asset sales. Warren expressed concern over the high percentage of distressed mortgage loans with a government guarantee being sold to Wall Street investors who are simply trying to turn a profit rather than achieve neighborhood stabilization outcomes.
"This meeting offered an important, constructive and meaningful opportunity to discuss broad goals we support with these community leaders," said Ed Golding, HUD Principal Deputy Assistant Secretary for the Office of Housing. "We are, and will continue to be, a strong and consistent supporter of those who toil on the front lines of our housing recovery. FHA takes its mission very seriously. Every day, we work to make sure households have access to affordable mortgage credit and to ensure the agency’s insurance funds remains viable for many millions of households who depend upon FHA. We will continue to explore all responsible options to avoid unnecessary foreclosures while keeping FHA healthy and available for future generations of homeowners."
"We are, and will continue to be, a strong and consistent supporter of those who toil on the front lines of our housing recovery. FHA takes its mission very seriously."
HUD announced significant changes  in DASP back in April in order to achieve better outcomes for borrowers. Under the new rules, loan servicers are required to delay foreclosure on a home for a year and evaluate all borrowers facing foreclosure for participation in the government's Home Affordable Modification Program (HAMP ) or a similar loss mitigation program. Loan servicers could previously foreclose on a home six months after they received the loan and were not required to evaluate borrowers for loss mitigation programs, though they were encouraged to do so.
The improvements to the NSO sales portion of DASP include giving non-profits a first look at vacant properties, allowing purchasers to re-sell notes to non-profits, and offering a pool of loans for non-profits only.
In July, FHA executed its first Distressed Asset Stabilization note sale of 2015 —the first such sale since the department announced its enhanced requirements in April. That sale included 7,837 defaulted single-family loans in 12 pools with a UPB of $1.4 billion. Included in the 12 pools were 6 National Pools, 5 NSO Pools, and one NSO Pool designed for a non-profit or a unit of local government bidders (located in Detroit, one of the areas hit hardest by the foreclosure crisis).