HUD boosting sales of distressed FHA loans

Purchasers must delay foreclosure for a minimum of 6 months

The U.S. Department of Housing and Urban Development is now accepting applications from investors interested in buying pools of severely distressed mortgages formerly insured by the Federal Housing Administration, HUD announced today.

Under its Distressed Asset Stabilization Program, on Sept. 12, HUD will be selling about 9,000 defaulted loans, about 40 percent of which will be located in four metropolitan areas particularly hard-hit by the foreclosure crisis and with large inventories of real estate owned (REO) properties: Chicago; Newark, N.J.; Phoenix; and Tampa, Fla.