“This sales method reduces costs for taxpayers but too often, properties are sold to large investors, who either flip them for profit or rent them out,” the White House said in a fact sheet detailing the proposed changes. Second Chance Claims Without Conveyance of Title (CWCOT) sales, which allow loan servicers to sell foreclosed properties directly to third parties without conveying them to HUD, are now the most common way FHA foreclosures are sold. In the meantime, the Biden administration is developing guidelines that will provide an exclusive listing period during which government entities, non-profits and owner occupant buyers will be invited to submit bids for “Second Chance” sales of FHA-insured foreclosed properties before they’re offered to investors.
NAR estimates builders will have to construct more than 2 million new housing units a year for the next decade to bridge the gap. In a recent report, the National Association of Realtors concluded that the rate of housing production has slowed over the past two decades, falling short by an estimated 5.5 million new units from 2001 to 2020. “MBA looks forward to continuing to work with the administration, Congress, and all other stakeholders on ways to address supply constraints and ensure government programs appropriately complement private capital to help both renters and homeowners.” “The lack of supply is a huge problem, and HUD and FHFA should do what they can administratively while Congress considers more significant initiatives,” Broeksmit said. Mortgage Bankers Association President and CEO Bob Broeksmit welcomed the news.
To accomplish that, Congress would need to expand the Low-Income Housing Tax Credit (LIHTC), and provide more funding for the HOME Investment Partnerships program, the Housing Trust Fund, and the Capital Magnet Fund. Wednesday’s announcement gets several federal agencies working on affordable housing issues while Congress debates the Biden administration’s more ambitious “Build Back Better Agenda,” which is geared at providing investments that would enable the construction and rehabilitation of more than 1 million affordable housing units. “These actions will expand access to critical capital for state Housing Finance Agencies, empower local communities to build more affordable housing using the historic investments contained in the American Rescue Plan, and advance equitable housing policies such as inclusionary zoning practices,” Housing Secretary Marcia L.
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