HUD Launches Another Initiative to Solve Foreclosure Crisis

HUD Secretary Shawn Donovan has announced a Neighborhood Stabilization Program (NSP) that gives grantees priority for buying foreclosed Federal Housing Administration (FHA)-insured homes. Called FHA's First Look Sales Method, the initiative also offers NSP participants - states, localities and nonprofits - a 10-percent price discount for about 14 days from the transfer of foreclosed properties to FHA. After the 14-day period, those properties remaining will be listed for sale under FHA's standard procedure. The initiative will be effective until May 31, 2013.

''We believe FHA First Look will provide communities with a powerful tool to help them convert these vacant properties into the affordable homes families need to thrive and our local economies need to recover,'' Secretary Donovan told the National Council of La Raza Annual Conference in San Antonio, Texas. ''The truth is, as hard as it is right now, it's even harder to imagine what would have happened had we not acted when we took office - when we were losing 753,000 jobs a month, home prices had declined for 30 straight months and Americans had lost $6 trillion in home equity.''

Thanks largely to the joint HUD-Treasury Home Affordable Modification Program (HAMP) and FHA's loss mitigation options, which together ''helped set a standard across the industry,'' the secretary pointed out, ''nearly 3 million borrowers have received restructured mortgages since April of 2009,'' almost three times more than lost their homes during that time.   7/12/2010

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