0
0
0

FHA’s Galante Says ‘No’ to FHFA-style REO-to-Rental Program

by Peter Thomas Ricci

reo-to-rental-program-carol-galante-fha-acting-commissioner-reo-housing-inventory-government-real-estate-housing1

Carol Galante, the FHA’s acting commissioner, has indicated that the agency has no plans to replicate the FHFA’s REO-to-rental-program.

By Peter Ricci

Acting Federal Housing Administration (FHA) Commissioner Carol Galante has announced that the FHA has no plans to incorporate an REO-to-rental program similar to that of the FHFA.

Making her comments at the HousingWire REperform conference currently underway in Dallas, Galante said that the structure of the FHFA’s REO-to-rental program did not meet the specific needs of the servicers and borrowers in the FHA’s structure.

FHA REO-to-Rental Program – Say No Go

“Looking at an REO-to-rental strategy, and while a rental strategy is very important, we decided it wasn’t the best solution for the FHA, servicers, borrowers and their communities,” Galante said, according to a HousingWire piece on the conference.

Some of the other details Galante mentioned included:

  • There are currently 700,000 delinquent mortgages on the FHA’s books, but rather than deal with them through a wide-ranging REO-to-rental program, the FHA is working to sell the notes through DebtX.
  • The goal is to sell roughly 10,000 delinquent mortgages per quarter via that method, and though Galante could not specify when the sales would take place, she did say the FHA would have more details soon about the plan.
  • There are conditions, though, that the FHA needs to consider as it moves forward with its plans; for instance, Galante said that no more than 50 percent of those delinquent properties can enter the market as vacant foreclosures.
  • She also said that because of that rule, a buyer of that mortgage would have to find a solution to avoid REO status, and allowing the homeowner to rent the property would be a feasible strategy.

Government-held REO Housing Inventory – Slowly Falling

Galante’s approach is the latest effort by the government’s housing institutions to decrease their REO holdings, and so far, their respective efforts have been quite successful.

As we reported earlier, between Fannie Mae, Freddie Mac and the Department of Housing and Urban Development, the government’s REO housing inventory has fallen by more than 18 percent from last year, and with the FHFA’s REO-to-rental program progressing well, we can probably expect those inventories to fall further.

Read More Related to This Post

Join the conversation

New Subscribe