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.
The City of Broken Sidewalks
Can Los Angeles fix 4,000 miles of broken sidewalks before the city hosts the 2028 Olympic Games?
Shifts in Shopping: Transforming Malls Into Parks
Maybe zombie malls still have a second life — one with a little greenery.
To Build More Housing, Cities Must Be Smarter in How They Use Land
How strategic land use policy decisions can alleviate the housing crisis and limit unsustainable sprawl.
Why Traffic Never Gets Better
Despite abundant research showing that roadway expansions provide limited congestion relief and increase long-term traffic problems, they still occur due to wishful thinking: advocates claim that “this” project is different.
San Francisco Tops ‘Urban Mobility Readiness’ List
An annual analysis of global cities assesses public transit, technology, and sustainability.
Bike-Mounted Sensor Could Improve Safety for Cyclists
A new camera technology can detect when vehicles pass too close to people on bikes.
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.
City of Prescott
Alamo Area Metropolitan Planning Organization
Village of Glen Ellyn
HUDs Office of Policy Development and Research
CORP - COnsulting Research Projects
City of Cambridge, Maryland
Newport County Development Council: Connect Greater Newport
Rockdale County Board of Commissioners