By Alan Zibel
Sales of foreclosed properties owned by the U.S. government have gotten bogged down this summer, and real estate agents are steamed about it.
The Department of Housing and Urban Development has been forced to delay the sale of several hundred foreclosed properties, causing complaints from real-estate agents who are frustrated that the deals can’t close.
The National Association of Realtors called attention to the delay on Wednesday in a press release on its report on pending sales of previously occupied homes. Lawrence Yun, chief economist for the trade group, called the delays “a nonsensical situation.”
The problem involves properties that fall back into HUD’s hands after borrowers default on loans backed by the Federal Housing Administration, a government agency. More than 540 properties in New England have been affected, including more than 190 in Massachusetts. The agency is still researching the extent of the problem in other parts of the country.
As a result of high demand for foreclosed properties, HUD ran out of money to pay lawyers or other closing agents who manage the sales of those properties, an agency official said. HUD has been negotiating new contracts.
Closings have resumed in Massachusetts, and buyers should only face temporary delays in the other states. The deadline for sales “will be extended, when necessary, at no cost to the buyer,” an agency official said, noting that buyers “will be advised as soon as funding becomes available for closings, and a closing date will be established as soon as possible thereafter.”
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