HUD To Begin Unloading Delinquent Mortgages In Smaller Bundles To Make It Easier For Cities, Non-Profit Groups To Help Homeowners Stay In Their Homes?

In New York City, The Associated Press reports:

• New York City is taking a novel approach to addressing enduring pockets of the home-foreclosure crisis by buying long-unpaid mortgages, with plans to help owners stay in their homes if possible or use the properties as affordable housing if not, officials say.
  
  It’s among the first cities to pursue buying such loans directly from the federal Department of Housing and Urban Development, officials say. Housing advocates and some lawmakers have pressed HUD to make it easier for cities and nonprofit groups, as opposed to investors, to buy troubled mortgages.
  
  New York announced the $13 million program []. So far, the program involves just 24 properties, containing a total of 41 homes and apartments. Officials say the cost includes millions in reserve for repairs that may not be required, and they cast the program as an experiment they hope to expand.
  
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  The money is coming from the City Council, a loan from investment bank Goldman Sachs, and settlements various banks have made with state Attorney General Eric Schneiderman over lending practices. Schneiderman, a Democrat, said the program is keeping delinquent mortgages from being auctioned to entities “whose goal is to profit off other people’s losses.”
  
  Nationwide, HUD has sold about 100,000 soured mortgages at discounts in the last several years, often to private equity firms and hedge funds.
  
  Housing advocates complain the firms have been too eager to foreclose on borrowers; the firms counter that many of the homes are abandoned. HUD has said the sales can give borrowers a last chance to save their homes, but the agency also has made some changes. Among them: extending a foreclosure moratorium from six months to a year after a sale, and offering some mortgages in smaller batches, since nonprofits often can’t afford bigger chunks.

For more, see To fight foreclosure, NYC buying mortgages.