HUD Announces Latest Nonperforming Loan Sale

The Department of Housing and Urban Development has released the details of its next nonperforming residential loan sale through the Distressed Asset Stabilization Program.

HUD will be offering 20 pools, containing roughly 10,500 notes and an aggregate unpaid principal balance of $1.7 billion. The offering will take place Sept. 14, HUD said Thursday.

Of the 20 pools, 12 will be Neighborhood Stabilization Pools with $800 million in unpaid principal balance and eight will be diversified national pools with $900 million in unpaid principal balance.

Additionally, five of the NSO offerings will only be made available to nonprofits or units of local governments, including the first-ever national nonprofit set-aside. This option allows nonprofits and local governments to submit loan-level bids for a minimum of 25 loans to a maximum of 5% of the pool's total number of loans in a designated national pool.

The subpool will be awarded to the nonprofit with a bid that delivers the greatest return to HUD, and the subpool will feature all of the same requirements as a traditional NSO pool.

In late June, the Federal Housing Administration announced new requirements for nonperforming loan buyers in response to concerns that the sales ultimately lead to vulnerable borrowers losing their homes.