On June 30, HUD announced a series of changes to its Distressed Asset Stabilization Program (DASP). Last year, HUD updated DASP to (i) extend the time period preventing foreclosure after the note is sold from six months to one year; (ii) require servicers to evaluate borrowers for the Home Affordable Modification Program (HAMP) or a substantially similar modification; and (iii) implement non-profit only sales. In accordance with the most recent changes to DASP, “[c]ertain families with distressed mortgages insured by the [FHA] may soon be eligible for a reduction of their outstanding loan amounts should their mortgages be sold through DASP.” In addition, HUD’s fact sheet for the recent changes announces that DASP will, among other things: (i) limit interest rate increases to no more than one percent per year after a five-year period where the rate is fixed, thereby implementing payment shock protection and ensuring consistency with HAMP; (ii) prohibit purchasers from “walking away” from vacant properties; (iii) revise the 120-day delinquency notice to advise borrowers that their loan may be sold; (iv) set a goal to sell 10 percent of assets to non-profits and local governments; (v) release performance and outcome data on a pool level (instead of a sale level); (vi) release demographic data on sales; (vii) strengthen requirements for investors to obtain Neighborhood Stabilization Outcome (NSO) credit when selling to non-profits; and (viii) target loans for DASP sales based on non-profit and local government interest.