HUD is set to conduct two auctions, the first of which aims to decrease financial risks to the Mutual Mortgage Insurance Fund by facilitating the sale of defaulted loans. A second auction is anticipated in September, involving about 2,000 additional loans worth $548 million. Participating bidders include nonprofits, local governments, and private firms. The proceeds will likely support the MMI Fund, which currently boasts a capital reserve ratio of 11.5%. Budget documents indicate a shift in priorities away from reverse mortgages, despite projections showing profitability in HECMs.
HUD's two planned auctions aim to reduce risk to the Mutual Mortgage Insurance Fund by promoting the efficient sale of defaulted assets, with a second expected in September.
Proceeds from the HECM loan sale are likely to support the MMI Fund, which has a strong capital reserve ratio of 11.5%, well above the statutory minimum.
Bidders for the HECM offerings can include nonprofits and private firms, while bids are selected based on the best value to HUD and require a deposit.
Budget documents suggest HUD's priorities may be shifting away from reverse mortgages, highlighting a request for $160 million for servicing MMI Fund programs.
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