Report: HUD Sales Of Delinquent FHA Mortgages Yields Big Payoffs For Sleazy Loan Servicers & Easy Profits For Private Equity Investors While Hastening The Boot For Struggling Homeowners

From a recent press release from the National Consumer Law Center:

• The U.S. Department of Housing and Urban Development’s (HUD’s) program for selling defaulted Federal Housing Administration (FHA) loans is the largest auctioning off of government-insured home mortgage loans in the nation’s history, yet the big winners are the large mortgage servicers who flout HUD rules while homeowners often unnecessarily lose their homes.
  
  To date, under the Distressed Asset Stability Program (DASP), HUD has sold over 105,000 FHA-insured home loans valued at $17 billion, primarily to private equity companies and hedge funds that bought the loans at big discounts.
  
  “HUD’s own data show that selling FHA mortgages through its Distressed Asset Stability Program does not help struggling homeowners and their communities in the long term,” said National Consumer Law Center attorney Geoff Walsh and author of Opportunity Denied: How HUD’s Note Sale Program Deprives Homeowners of the Basic Benefits of Their Government-Insured Loans.
  
  “HUD excludes homeowners from the loan sale process by not even notifying them before the sales. As a result of the sales, a homeowner loses valuable protections from foreclosure, protections that are available only when the loan is FHA-insured.
  
  Through DASP sales, HUD pays off the mortgage servicers who routinely flout the agency’s own rules, and then sells the loans at fire-sale prices to private speculators who reap profits while doing little to help vulnerable homeowners remain in their homes.”
  

For more, see Report: HUD’s Sales of FHA-Defaulted Mortgage Loans Benefit the Big Mortgage Servicers and Hedge Funds While Homeowners Lose.

Full report, charts and tables (including the 10 largest buyers of DASP note sales), and web only materials are available at: http://bit.ly/1WTd5sW