Federal Deposit Insurance Corporation (FDIC) and the Department of Housing and Urban Development (HUD) have issued statements regarding the need for alternative disposition strategies for distressed assets such as foreclosed homes and other non-performing notes.
HUD is acting on behalf of the FHFA, Fannie Mae and Freddie Mac.

Both entities have cited that placing these properties on the market in a traditional manner (as individual listings) will further clog the market and negatively impact home values and neighborhood stabilization. With this in mind, HUD and the FDIC are looking at strategies to efficiently liquidate existing, as well as “shadow inventory,” in bulk to investors who have the financial wherewithal to make these large purchases.

How do bulk sales work?

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The foreclosure wrath appears to be squashing California’s grapes, according to Bloomberg.com.

Napa Valley — the most famous wine-making region in the United States and among the most respected in the world — is currently on “life support,” enduring its most difficult financial downturn in more than two decades.

The report indicates that as many as 10 wineries could be lost to foreclosure in 2010 alone, which is 10 more than what was recorded just two years ago in 2008 (zero).

The reason?

Connoisseurs, collectors and wine enthusiasts are stocking their cellars with less expensive vintages, reducing their expenses as the national economy attempts to recover from a major recession.

In fact, Franzia’s box wine, which costs about $8 a pop, is currently flying off the shelves.

Stephen Rannekleiv, an analyst, explains the domino effect:

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Former Playboy Playmate (Nov. 1980) and original cast member of “The Real Housewives of Orange County,” Jeana Keough, has avoided foreclosure on her luxurious seven-bedroom, nine-bathroom home in the prestigious Coto de Caza community in southern California.

The Orange County Register reports that Keough was able to negotiate a loan modification with her lender, JPMorgan Chase & Co, on the $4 million “custom French country estate.”

However, she says it wasn’t easy:

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The U.S. Department of the Treasury will soon offer lenders and distressed homeowners $1,000 and $1,500, respectively, motivating all parties to consummate short sale deals and, in the process, stem the foreclosure tide, according to the New York Times.

Here are the basic details:

“Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in ‘relocation assistance.’”

Short sales are transactions in which lenders accept offers from new buyers for amounts that are less than the current principal balances.

It’s often complicated, however, because there are so many moving parts. Additionally, everyone has to agree to the new sale prices, including the lenders, which is the reason most deals get hung up.

Lenders simply don’t have the resources right now to handle the tremendous incoming load. And when they do finally get around to reviewing short sale requests, chances are the documents are out of date or the buyers have set their sights on less complicated deals.

The good news is that with $1,000 to spread around to the lenders, it could help them offset the costs to negotiate these types of deals in a shorter and more efficient time frame.

As the name suggests.