This article from HousingWire discusses the Federal Deposit Insurance Corporation’s (FDIC) plan to sell nearly $114.8 billion in mortgages seized from failed regional banks. The FDIC began seizing these mortgages in late 2008 and early 2009 as more banks across the U.S. failed. Most of the mortgages are connected to failed banks with headquarters in the Midwest, Texas and the Southeast.

The FDIC is now preparing to release many of these loans and mortgage-backed securities (MBS) onto the public market. These sales are expected to occur over the course of the next year and the FDIC believes that this could be one of its most successful asset recovery efforts to date. The agency has made significant progress in terms of reducing the size of its inventory of failed loan assets over the last decade, but this could be the largest sale yet.

The FDIC will carry out the sales in two phases. The first phase will involve smaller regional banks from across the country and the second phase will include larger regional banks. The FDIC will focus on regional banks because they are more likely to hold assets with greater value than their larger counterparts. The agency has also put a great deal of effort into rehabilitating assets to ensure a smoother transition for the new owners.

This large-scale sale of mortgage assets is a great sign for the U.S. housing market. The FDIC’s efforts to reduce the number of failed loans on its balance sheet, and now to return these assets to the public market, will help to reinvigorate the sector and ensure stability for future buyers and investors. This move is also an indication of the FDIC’s commitment to protecting taxpayer money while also helping to foster a healthy financial environment.

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