The US Department of Housing and Urban Development (HUD), in a Draconian move, would appear to be forsaking their Mission Statement while attempting to cash in on investor hysteria. Regardless of which Side of the Aisle you may be, the latest move to allow Investors to enter into the purchasing arena in a fraction of the previous time previously. When is this slated to occur? 01 December, 2013; 72 hours from now! Before we go further, though, let’s take a look at HUDs Mission Statement:
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
Mark Ferguson, over at InvestFourMore, summed up the time line pretty good,
Right now on FHA insured HUD homes there is a 30 day owner occupant bid period. The first 10 days are a sealed bid period for owner occupants only and then the next 20 days are a daily bid period for owner occupants. Investors cannot bid during this time frame and I have had many investors complain to me about this policy. There is now going to be a 15 day owner occupant bid period on FHA insured HUD homes. The the initial 10 day sealed bid period will stay the same, but now there will only be a 5 day daily bid period for owner occupied buyers only after that initial 10 day bid period. Investors can bid on HUD homes on the 16th day and will not have to wait until the 30th day. This change goes into effect on December 1st 2013. FHA uninsured homes bid periods will not change. They will still have a 5 day owner occupant only bid period and investors will be able to bid on the 6th day.
An Industry Insider, speaking on condition of anonymity, told me in a recent email exchange,
It seems like HUD is more and more interested in cashing in on the investor hysteria. It’s a bubble that will pop, and it’s a phenomenon that IMHO is dramatically and dangerously skewing home valuations, rent prices, and even new building demand. That aside, the spin here is that HUD is forsaking its mission and prioritization of owner occupants. They used to make investors wait 6 months.
I reached out to Jody Shenn over at Bloomberg whom recently penned an interesting article about HUD having difficulties with respect to a recent auction pool. She was out of the office at the time of our publication. Her article lead off with,
The U.S. Department of Housing and Urban Development for the first time failed to sell some of the soured mortgages it’s auctioning off in the wake of the housing crisis, according to four people with knowledge of the results.
Singularly, everything may look like business-as-usual; however, when you begin to look at issues we have covered on here like the 11th hour Awarding of the HUD Management and Marketing (M&M) 3.5 R-ATL-02006 to Matt Martin Real Estate Management and BLB Resources in what I consider a Hail Mary Budgetary Line Item debacle, one has to begin to wonder.
When business-as-usual begins to have the look and feel of the furtherance of Special Interest Groups the American Public need to place closer scrutiny upon the legislative process. Going all the way back to HUD Secretary Alfonso Jackson, there has always been a lackluster in the oversight of HUD. The current HUD Secretary, Shaun Donovan, may very well be staring down the same fate should Seats change on the Hill.
If there is one axiom in the Property Preservation Industry it is that change is happening all around us. The reality is that even when I spoke in the past about the National Association of Mortgage Field Services (NAMFS), the Association is comprised of a multitude of honest and hard working people. Eric Miller, as its Executive Director, did not wake up each and every day ruminating on those whom were doing unconscionable things. I would like to think that Miller, instead, focused upon where he could make positive change.
You see, at the end of the day, while we may associate the ill of the world upon Leaders; Miller with NAMFS and President Obama with HUD, the reality is that change at any level is a difficult thing within Institutions.
So, as many of us are sitting down to a Thanksgiving Dinner and contemplating how fortunate we are to be in our own homes, the next generation may be doing their pondering from inside of a rental home. So, while the world is still somewhat our own, let us each and all hold each other a little bit more closely; let us be a bit more thankful for the brave men and women serving abroad to ensure another safe Thanksgiving and let us look forward to a holiday season without rhetoric.