Feds to sell off delinquent loans, aiding South Florida borrowers in foreclosure

By Kimberly Miller
Palm Beach Post Staff Writer

Thousands of South Florida borrowers in foreclosure and ineligible for a loan modification may get another chance to save their home in an expanded Federal Housing Administration program announced Friday.

Beginning in September, defaulted loans insured by the FHA will be sold in discounted pools to private investors who have more flexibility in negotiating lower mortgage payments, reducing loan amounts or offering other options such as rent-to-own.

The investors, which can include non-profit community agencies, must delay foreclosure proceedings for at least six months while working with the homeowner.

Florida has about 366,650 loans insured by FHA, according to a first quarter report from the Mortgage Bankers Association. Of those, 15 percent are in foreclosure or 90 days or more late on payments.

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