The U.S. Federal Housing Administration said recently that it would start taking bids from investors for a program intended to sell off thousands of delinquent home loans, as it is almost doubling an offering first announced last month.
The FHA, which protects lenders against borrower defaults, said it would take applications for 9,000 mortgages that are scheduled for bulk sale as early as September, up from the original goal of selling 5,000.
A majority of the loans are located in four metropolitan areas hit particularly hard by the housing boom and bust: Chicago, Phoenix, Tampa and Newark. More than 710,000 FHA-backed mortgages are in default, or about 9 percent of the loans the agency insures. In all, it backs an estimated $1.1 trillion in mortgages.