On June 8, HUD announced the establishment of the Distressed Asset Stabilization Program, an expansion of an FHA pilot program allowing private investors to purchase pools of mortgages headed for foreclosure, and charging investors with helping to bring the loans out of default. Servicers can place a mortgage loan into a pool if (i) the borrower is at least 6 months’ delinquent on its mortgage; (ii) the servicer has exhausted all steps in the FHA loss mitigation process; (iii) the servicer has initiated foreclosure proceedings; and (iv) the borrower is not in bankruptcy. Sales are scheduled to begin in September. HUD Release.
