HUD Announces First Vacant Loan Sale

The U.S. Department of Housing and Urban Development (HUD) recently announced the first of a new offering type, the HUD-Held Vacant Loan Sale 2017-1 (HVLS 2017-1).

On November 30th, 2016, HUD will offer multiple residential mortgage pools consisting of approximately 1,700 notes and an aggregate broker price opinion of approximately $250 million.

The sale will consist of due and payable Secretary-Held loans. The loans are first liens secured by 1 to 4 unit, vacant residential properties where the last surviving borrower is deceased.

Nearly 1.4 million U.S. residential properties representing 1.6 percent of all residential properties were vacant as of the end of the third quarter, according the Q3 2016 U.S. Residential Property Vacancy and Zombie Foreclosure Report from RealtyTrac.

The report states that 18,304 U.S. residential properties actively in the foreclosure process were vacant. This represents 4.7 percent of all residential properties in foreclosure. In addition, there were 46,604 vacant bank-owned residential properties as of the end of the third quarter.

“A strong seller’s market along with political pressure has likely motivated lenders to complete the foreclosure process over the past year on many vacant properties that were lingering in foreclosure limbo for years,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “While that has reduced the number of vacant properties in the foreclosure process — so-called zombie foreclosures — it has also resulted in a corresponding rise in the number of vacant bank-owned homes. Assuming that the foreclosing lenders are maintaining these properties and paying the property taxes, they pose less of a threat to neighborhood quality than zombie foreclosures, but they still represent latent inventory in an inventory-starved housing market.”