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» VISIT US ONLINE @ DSNEWS.COM 23 FHA MAKES ENHANCEMENTS TO DISTRESSED ASSET STABILIZATION PROGRAM HUD announced that is making the most significant improvements to date for its Distressed Asset Stabilization Program (DASP) that include requiring purchasers of the delinquent loans to offer principal reduction to qualified borrowers. e Department announced in mid-May that enhancements to DASP were coming soon; DASP, as well as the FHFA's delinquent loan sales programs, has endured heavy criticism from housing advocacy groups. In April, a coalition of activists called DASP sales a "Wall Street giveaway" because the majority of these loans have been sold to Wall Street firms or private investors whom the activists believe are more interested in profiting financially from the crisis rather than achieving the best outcomes for borrowers. e enhancements announced include prohibiting investors from abandoning low-value properties and offering greater opportunities for non-profits and local governments to participate in DASP, according to the Federal Housing Administration. DASP is meant to be used only as a last resort; all FHA loss mitigations must be exhausted before a loan is sold through DASP. e loans sold through DASP are an average of 29 months delinquent, according to FHA. "FHA is deeply committed to protecting struggling homeowners and making certain they have the greatest opportunities to avoid foreclosure and remain in their homes," said Ed Golding, HUD's Principal Deputy Assistant Secretary for the Office of Housing. "While thousands of homeowners avoided foreclosure through this note sales program, we continue to explore new ways to help these families and to offer more opportunities for public-minded organizations to have a seat at the table." e announced enhancements to DASP include: » Principal Reduction/Capital Arrearage Forgiveness—is is the first option investors must consider when evaluating borrowers for a loan modification. » Payment Shock Protection—Consistent with the government's Home Affordable Modification Program (HAMP), FHA will limit interest rate increases to no more than 1 percent after a five-year period where the rate is fixed. » Walk-Away Prohibition—Purchasers of single-family mortgages sold through DASP are prohibited by FHA from abandoning lower-value properties in order to prevent the spreading of blight. » Alternative Bidding for Non-Profit Buyers—Offering more opportunity for non-profits and local governments to participate in DASP auctions by allowing qualified non-profits to bid on partial pools of notes up to 5 percent of a national pool, and pay the reserve price. FHA announced enhancements to DASP last year that include requiring purchasers of DASP loans to suspend foreclosure actions for a year (increased from six months), providing more advanced notice of pending sales, and extending the due diligence periods to accommodate non-profit organizations seeking to participate. FHA also created specific pools of mortgages to be offered exclusively to non-profits and local governments. Leaders of the organizations that have been aggressively pressuring HUD for enhancements to DASP expressed their approval of the announcement. "Cities around the country have been frustrated by a lack of meaningful support from HUD in our foreclosure prevention and affordable housing programs," said John Avalos, a member of the San Francisco Board of Supervisors. "So it's a real relief that HUD is going to work more collaboratively with local government and local leaders to make a plan for these troubled mortgages. Up until now, I feel like HUD's mortgage sale program has been doing more harm than good to our communities." The best defense for a better neighborhood Real People, Real Results www.assero24.com/defense Completed foreclosures decreased 6.9 percent year-over- year as reported by CoreLogic. KNOW THIS

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