The sale of distressed mortgages is far less publicized than talk of the market for foreclosed properties. But these loans are being actively traded—in 2011 this activity included 149,000 loans which translates to roughly $26 billion in trades.
Strict non-disclosure agreements require that participants keep the sales of these loans largely private, but there are opportunities for nonprofit organizations to get into the game, which could have wide ranging effects on their work to stabilize neighborhoods, writes George Ostendorf. Nonperforming loans (NPLs) that are 30-days or longer behind in payment are sold in pools at 50-65% of current market value. Nonprofit investors can team with for-profit partners for a mutually beneficial relationship:
"For nonprofit investors that are able to raise long-dated, patient money to enter the NPL space, there could be myriad opportunities to partner with for-profit investors who may, for example, wish to resell portions of their pools that are from judicial states or those that could benefit from time to repair credit," observes Ostendorf.
"For-profit partners could also offer specific forms of expertise. The pricing of mortgage loans, acquisition due diligence, legal compliance pertaining to mortgage sales, and the servicing of mortgage loans all require specialized knowledge and analytical abilities. Organizations seeking to enter the distressed loan market that do not have those abilities in-house would be wise to partner, or enter into fee-for-services agreements, with those who do."
Thanks to Brittany Stanley
FULL STORY: Distressed Mortgages for Sale
Defining the 'Community' in Community Land Trusts
As community land trusts take root and expand, they face numerous questions on how to stay communally-focused while their geographic scope grows.
Lessons from the Last Housing Crisis: How to Get Control of Properties
How to keep affordable apartments and single-family homes out of the hands of institutional investors if the coronavirus pandemic leads to a giant wave of evictions and foreclosures.
Safe At Home: Securing Affordable Housing in a Pandemic
An interview on the critical importance of securing quality affordable housing during the pandemic, coupled with the challenge of responding to the operational needs of ongoing development projects.
Planetizen Federal Action Tracker
A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.
San Francisco's School District Spent $105M To Build Affordable Housing for Teachers — And That's Just the Beginning
SFUSD joins a growing list of school districts using their land holdings to address housing affordability challenges faced by their own employees.
The Tiny, Adorable $7,000 Car Turning Japan Onto EVs
The single seat Mibot charges from a regular plug as quickly as an iPad, and is about half the price of an average EV.
As Trump Phases Out FEMA, Is It Time to Flee the Floodplains?
With less federal funding available for disaster relief efforts, the need to relocate at-risk communities is more urgent than ever.
With Protected Lanes, 460% More People Commute by Bike
For those needing more ammo, more data proving what we already knew is here.
In More Metros Than You’d Think, Suburbs are Now More Expensive Than the City
If you're moving to the burbs to save on square footage, data shows you should think again.
Urban Design for Planners 1: Software Tools
This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.
Planning for Universal Design
Learn the tools for implementing Universal Design in planning regulations.
Smith Gee Studio
City of Charlotte
City of Camden Redevelopment Agency
City of Astoria
Transportation Research & Education Center (TREC) at Portland State University
US High Speed Rail Association
City of Camden Redevelopment Agency
Municipality of Princeton (NJ)