In an effort to help struggling homeowners avoid foreclosure, the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) announced last Friday major changes to the Distressed Asset Stabilization Program. The most significant program change requires loan servicers to delay foreclosing on a property for a year and to evaluate default borrowers to see if they qualify for a loss mitigation program like the Home Affordable Modification Program (HAMP). Previous program requirements allowed loan servicers to foreclose after six months and only recommended that borrowers be assessed for programs like HAMP. Housing advocates like Ed Gorman of the National Community Reinvestment Coalition says, “We applaud the FHA for taking these significant steps to improve homeownership opportunities in neighborhoods hard hit by the foreclosure crisis.”

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Image Source: David Shankbone