The U. S. Department of Housing and Urban Development (HUD) has announced it will sell approximately 20,000 severely delinquent mortgage loans insured by the Federal Housing Administration (FHA) in an attempt to reduce the shadow inventory and hone in on areas showing high foreclosure activity. Through its Distressed Asset Stabilization Program (DASP) it will increase funds to the FHA’s Mutual Mortgage Insurance (MMI) Fund and hopefully help some of the communities hit hardest by non-performing loans. The first sale date is set for June 26, followed by a second sale July 10 for properties located in southern Calif., Chicago, southern Ohio, and North Carolina. The loans are sold competitively at a market-determined price usually lower than the outstanding principal balance. HUD sold 16,000 seriously delinquent mortgages in March, and expects to sell 40,000 this year, as MHProNews has learned.
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