Single Family Loan Sale FAQs

 

1. What is the purpose of the Single Family Loan Sale (SFLS)?
The SFLS Program was instituted in 2010. Under this program, FHA can accept assignment and sell distressed mortgages, prior to foreclosure and property conveyance to FHA, thereby avoiding costly and potentially lengthy foreclosures. Through the SFLS Program and other FHA non-foreclosure options (e.g., Claims without Conveyance of Title and Pre-foreclosure sales), FHA can assess distressed insured loans to determine the best means of proceeding with the insurance claim where loss mitigation is not successful in modifying or bringing a loan current. The SFLS Program maximizes recoveries to the MMI Fund, reduces claim costs, minimizes the time that assets are held by FHA, and helps keep borrowers—otherwise headed to foreclosure—in the home. The Program also serves as part of FHA’s effort to target relief to areas experiencing high foreclosure activities. For purchasers, the program is an opportunity to acquire assets at competitive prices with the flexibility to service the assets while providing borrowers an opportunity to avoid costly foreclosures. The program is meeting financial goals as the amounts offered for these assets are steadily rising as volume has increased in recent years.

2. What is a loan sale?
Note sales are auctions of severely distressed single family mortgages insured by the FHA and assigned to FHA after the payment of a claim. FHA insurance is removed concurrent with the sale of the loan. The SFLS program is a core element of FHA’s asset disposition strategy, accounting for a larger share of dispositions as the program has been refined for better execution.

3. How are loan sales structured for the National and NSO sales?
Under the Distressed Asset Stabilization Program (DASP), loans are segregated into two types of pools: the National pools; and the Neighborhood Stabilization Outcome (NSO) pools, which are secured by properties in a limited geographic area and have specific servicing requirements designed to encourage outcomes that help stabilize neighborhoods. Purchasers of NSO pools are required to achieve neighborhood stabilizing outcomes on no less than 50% of the loans in each NSO pool they purchase. These acceptable outcomes include Mortgage Loan Re-Performance, rental to a borrower, gift to a land bank, or a loan payoff. By adding the NSO component to the SFLS Program, the Program strengthens its strategic focus on community stabilization.

4. How do I register to become an authorized bidder HUD?
HUD has certain eligibility requirements that have to be met by both the servicers and the bidders. Click the following link to register to become an authorized bidder.

5. How do I get in contact the SFLS Transaction Specialist?
Toll Free Number: 1-844-709-0763
Email: HUDSales@VerdiAssetSales.com

6. Where can I find more information about the HUD Asset Sales?
Click this link for the HUD Asset Sales Information