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» VISIT US ONLINE @ DSNEWS.COM 67 COVER STORY INDUSTRY INSIGHT INDUSTRY INSIGHT INDUSTRY INSIGHT For those of us in the industry, we've seen our fair share of housing programs, particularly since the mortgage crisis. HAMP, HARP, HHF, HAFA—it's an alphabet soup of different programs designed to provide support and options to a borrower in distress. Many of these programs have provided much-needed help to consumers while bolstering the market during a period of uncertainty. But these programs come with guidelines and qualifications and there are certain loans that just cannot be modified using their specific criteria. As a result, many agencies have found themselves carrying distressed portfolios for long periods of time, unable to find solutions that allow both the homeowner and the agency to move forward. DUMPING THE DISTRESSED For a variety of reasons we all understand, agencies do not want to hold these portfolios any longer. e loans have been delinquent for years, on average, and the borrowers are typically exhausted by a variety of loss mitigation efforts and many are in foreclosure. So what's an agency to do? Sell, of course. And who can blame them? But the sales of these pools has sparked controversy throughout the industry—and because of the purchasers, not necessarily the sale itself. Many of these pools are sold to private investors, parties who, according to critics, have their own economic incentives that far overshadow helping the homeowner or stabilizing the neighborhood. e outcry has been so loud that agencies like Freddie Mac have added requirements to the transactions designed to improve outcomes for both borrowers and communities. ey also divide the pools into groupings that target participation by smaller investors, such as nonprofits. ere is nothing wrong with these requirements. In fact, they're good for the industry, the communities they support, and the borrower. Many times, modifications are successful because the borrower truly wants to remain in their home and has the support of their community. However, these requirements send a negative—and inaccurate—message that private investors are looking for a fast foreclosure. NOT ALL INVESTORS ARE CREATED EQUAL I don't think anyone would argue that private investors aren't financially motivated. It's how their business works. But to assume that fiscal 67 DOWN STEREOTYPES

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