The Department of Housing and Urban Development has sold a 60% interest in a $411 million pool of nonperforming single-family loans to Citigroup Global Markets Realty.Citigroup is now responsible for servicing, restructuring, or disposing of the loans that were formerly insured by the Federal Housing Administration. This represents the third asset sale by HUD in which defaulted loans that are not good candidates for loss mitigation are placed on the auction block. HUD retains a 40% interest in the joint venture with Citigroup, and it shares in any recoveries. HUD estimates that this demonstration program could save the federal government $50 million.
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