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HUD Changes Distressed Loan Sale Requirements

The Department of Housing and Urban Development (HUD) is
tweaking its bulk loan sales program to give distressed borrowers a better shot
at staying in their homes.  HUD announced
today that investors who purchase delinquent mortgages through the Department’s
Distressed Asset Stabilization Program (DASP) will have to delay foreclosures
for one year after purchase rather than the six month hiatus that had
previously been required.

In addition loan servicers will have to evaluate all
borrowers
in the loan pool for eligibility for the Home
Affordable Modification Program (HAMP) or a similar loss mitigation program.  In the past the assessment of borrowers for
loan modifications was encouraged but not required.

 

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