Guidehouse Streamlines Federal Housing Asset Sales Transaction Cycle

In 2001, the U.S. Department of Housing and Urban Development (HUD) established The Office of Asset Sales (OAS) under its Federal Housing Administration (FHA) program to coordinate sales of single-family, healthcare, and multifamily mortgage notes. Over the past two decades, the FHA has assembled a seasoned team of professionals and industry experts to execute those sales in support of HUD’s mission, while reducing losses for FHA’s insurance funds.

Since 2014, Guidehouse has supported OAS in the sale of more than $7 billion in mortgages, including four forward sales and 11 Secretary-held reverse mortgage sales. Our team has developed relationships with stakeholders throughout the mortgage industry and assisted with many aspects of the asset-sales cycle, including closing transactions, conducting post-closing tasks to transfer assets to winning bidders, and performing other tasks related to the loan sales program.

Challenge

To achieve its mission of promoting home ownership, maintaining affordable housing, preserving communities, and increasing participation in HUD-held multifamily and healthcare mortgage notes by nonprofits and governmental entities, OAS turned to its Transaction Specialist Team (with Guidehouse as a subcontractor to Falcon Capital Advisors) to help streamline its asset sales transaction cycle.

Solution

To enhance the asset sales transaction cycle for optimal efficiency and success, the Guidehouse team:

• Analyzed the competitive landscape and developed a sales strategy report that included recommendations for pooling and disposition strategies.
• Prepared a marketing plan to identify interested firms, engage in direct-marketing efforts with industry professionals, and developed and placed advertisements in industry-leading publications and media outlets.
• Relied on our extensive industry connections database to continuously monitor investor interest and provide the client with updated market feedback that can help shape policy and procedures.
• Supported the creation of pools solely available to nonprofits and local government entities through HUD’s Neighborhood Stabilization Program and continued to cultivate relationships throughout the secondary mortgage industry in support of that program.
• Coordinated bidder qualification and worked with teaming partners to develop a streamlined bid platform for the distribution of transaction materials, presentation of loan-level due diligence, and secure execution of blind bidding.
• Established a comprehensive set of quality-control/quality-assurance procedures.
• Worked with external servicers and the HUD National Servicing Center to facilitate loan intake and loan package validation.
• Conducted loan file due diligence and comprehensive quality assurance checks of the final database and loan due diligence packages.
• Contributed to the post-sale report by providing outcome summaries and lessons learned that can be applied to enhance future transactions.

Impact

By building important industry relationships in the non-performing loan space and developing new strategies to streamline the asset sales transaction cycle, Guidehouse has helped increase the level of interest and capital deployed—delivering significant value-added services to the disposition of FHA-insured loans and meeting HUD’s mission-driven goals of expanding affordable housing.