FHA published a proposed rule that seeks public feedback on its delinquent note sale program.
What’s next: Public comments must be submitted by September 16, 2024.
Why it matters: Note sales of delinquent mortgages have been tested by HUD since 2002. This proposed rule transitions the program from a demonstration to a permanent program.
- HUD has conducted 12 HECM note sales — the most recent one in May 2024 — consisting of due and payable Secretary-held loans where all borrowers were deceased and not survived by a non-borrowing spouse.
The big picture: The proposed rule includes changes made to the demonstration program under the Biden-Harris Administration that required all note sale purchasers to adhere to mission-oriented post-sale requirements, including offering a “first-look” to owner-occupants, nonprofit organizations, and government entities when properties associated with the purchased notes are sold.
