Industry News

HUD again seeks end to seller-funded loans

Real estate roundup

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The following is a real estate news roundup: HUD still trying to end seller-funded loans The Bush administration is again moving forward with a proposal to ban seller-funded down-payment assistance for FHA-backed loans, reopening the public comment period on the plan for 60 days. The Department of Housing and Urban Development was forced to reopen an administrative proceeding on the rule change after a judge ruled it did not adequately explain its reasons for reversing past policy on seller-funded loans -- a practice it defended as recently as 2005 (see Inman News story). Now HUD argues that the loans artificially inflate home prices and are three times more likely to end up in foreclosure. In a speech Monday to the National Press Club, Assistant Secretary for Housing Brian Montgomery said that HUD had $4.6 billion in unanticipated losses -- mostly due to increased seller-funded loans -- and could require taxpayer assistance to continue operating for the first time in its...