The Federal Housing Administration—which holds title to 700,000 seriously delinquent mortgages—plans to ramp up its single-family nonperforming loan sale efforts, according to housing commissioner Carol Galante.
FHA currently has a pilot “601 Note Sale” program in place, and recently completed the disposition of nonperforming loans in the Chicago area. Its goal is to sell notes in large pools before they enter foreclosure.
Investors generally purchase NPLs at significant discounts. This gives investors the flexibility to renegotiate the notes with borrowers so they can stay in their homes.
“Look forward to additional announcements on this soon,” Galante told the National Association of Realtors on Tuesday.
The housing commissioner also told the Realtors that FHA is changing its condo policies to create more opportunities for first-time homebuyers. “These changes will be published very, very soon,” Galante said. But she warned the changes won’t go into effect until FHA completes a lengthy regulatory process.