The Department of Housing and Urban Development (HUD) announced a long anticipated NPL note sale today. The sale, scheduled for mid-November, will comprise of approximately $1.3 Billion in non-performing loans. The loans are located throughout 15 states.
This sale, along with this year’s previous sales, will put the NPL sales total to over 12 Billion. That is a record setting number but we have a long way to go. In fact, over $134 billion in NPL’s remain on the books.
The results of this sale will be very interesting as it is quite different than the other Government Sponsored Entities (GSE) sales this year. Congressman got involved and they are making the sale of these assets conditional upon doing a certain % of workouts.
This is an absurd condition. My guess is that the sale will results in the headlines as a huge success and a great step forward in helping the poor citizens who were harmed by the lending crisis. The aftermath however will be different and unreported.
The buyers will say that they will meet the condition when they buy but they have no full intent to meet the number of required workouts.
We will just have to wait and see.