According to a Reuters report, the FHA could hold a bulk sale auction of delinquent mortgages as early as September. The agency originally planned to sell 5,000 mortgages, and the majority of the troubled loans originate from four metropolitan markets: Chicago; Phoenix; Tampa, Fla.; and Newark, N.J.
‘FHA not only avoids the costs associated with a long foreclosure process, but also the high costs of maintaining and selling vacant properties in already distressed markets,’ Acting FHA Commissioner Carol Galante said in a statement.
More than 710,000 FHA-backed mortgages – or 9% of the loans insured by the agency – are in default. In all, it backs an estimated $1.1 trillion in mortgages.