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HUD secretary announces pilot program to reduce foreclosures
date: July 9, 2008
SOURCE: Crain's Detroit Business
By: Christy Schmitz
U.S. Housing and Urban Development Secretary Steve Preston announced a pilot program that would reduce housing foreclosures in his speech today at the Detroit Economic Club.
The program would stop foreclosures before they happened by creating a market in which lenders and investors could sell their nonperforming mortgages.
Preston said HUD would facilitate this sale, transferring the mortgage loans to joint-venture partners that specialize in foreclosure prevention. The partners would then be responsible for servicing the loan and helping families stay in their homes.
Preston said nonperforming mortgages would be sold at discounted prices, allowing new lenders — facilitated through HUD — to make loans more affordable.
These lenders would then be able to assist mortgagees in refinancing, ultimately preventing loan foreclosure before it happened.
“We’re in the process of talking to joint venture partners,” Preston said after his speech.
“We’re hoping the program will be up and running soon.”
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