The Department of Housing and Urban Development is starting a pilot program in Detroit to purchase Federal Housing Administration single-family loans from lenders after all loss-mitigation options have been exhausted and foreclosure is the next step. "Under this program, we will create means for lenders or investors to sell their nonperforming mortgages before foreclosure to HUD and a joint-venture partner who will be responsible for servicing the loan and helping families stay in their homes," HUD Secretary Steve Preston said. HUD expects to purchase the FHA loans at a "significant discount" so the joint-venture partner can modify the loans and make it more affordable for the homeowners.
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