Newspaper article THE JOURNAL RECORD

Proposed Sale of HUD Inventory Draws Fire from Brokers, Realtors

Newspaper article THE JOURNAL RECORD

Proposed Sale of HUD Inventory Draws Fire from Brokers, Realtors

Article excerpt

Brokers and real estate agents nationwide are enraged over a proposal being considered by the federal government to sell off its single-family home inventory to private investors.

If the U.S. Department of Housing and Urban Development follows through on its plan, they say, many people will find themselves out of work, and low- to middle-income families will be unable to buy affordable housing.

"We have a viable program that works," said Lily Rogers, a closing attorney for HUD and Veterans Administration properties with Forrest H. Clark in Fort Worth and Houston. "It (the new proposal) does not benefit anyone."

In June, HUD headquarters in Washington announced that the department was seeking proposals from private industry for alternate methods of selling off its inventory of approximately 35,000 homes.

HUD said it is looking to sell off as much of its inventory as possible to boost the Federal Housing Authority insurance fund. The government set up the fund to provide insurance to private lenders against loss on home mortgages backed by HUD.

HUD has lost an estimated $7 billion on bad mortgages made by the FHA, according to a report by the General Accounting Office.

Of the 35,000 homes in HUD's inventory, 10,100 are in Region 6, which includes Texas, Oklahoma, New Mexico, Louisiana and Arkansas. The next-largest region is Region 4, which includes Kentucky, Tennessee, North Carolina, South Carolina, Georgia, Alabama, Florida and Mississippi and has 7,760 homes.

In the last year, HUD nationwide has sold more than 15,000 homes, reducing its inventory from a high of nearly 50,000 properties.

HUD has sold more than 23,000 homes in Region 6 in the last few years, said Walter Sevier, deputy regional administrator.

Sevier declined to comment on the proposed program, referring questions to the agency's Washington headquarters, where the idea originated.

Terms of potential sales were spelled out in an eight-page proposal, which among other things specified that sales be conducted in lots of 2,000 homes and that deferred payment be considered for financing the sales.

The agency received nine responses by the Aug. 26 deadline. It is now seriously considering a few of those, including one that reportedly involves selling the homes to a nationwide mortgage corporation at 40 percent off the foreclosed price. …

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