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The Federal Housing Finance Agency (FHFA) today invited investors interested in purchasing pools of Fannie Mae, Freddie Mac and FHA foreclosures in the nations hardest-hit metropolitan areas with the requirement they rent them for a period of year to pre-qualify.
The new bulk sales program, under discussion since August, will begin with a pilot program where Fannie Mae will offer for sale pools of various types of assets including rental properties, vacant properties and non-performing loans with a focus on the hardest-hit areas. The first transaction will be announced in the near-term.
The purpose of the pilot phase will be to examine investor interest in various types of assets,including the location, size, and composition of pools of assets; the ways in which investors maximize the participation of experienced local firms and organizations that can provide the types of services and support needed to ensure community stabilization; the types of structures and/or financing that improve returns to the sellers as well as home values in impacted markets; and the process by which investors are qualified to and ultimately participate in the sales transactions.
FHFA said today it is also looking at ways to improve REO sales to homeowners and small investors, enhancing the existing retail sales strategy at Fannie Mae and Freddie Mac. Both companies sell the majority of their REO properties to owner-occupants at close to market value.
"This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities," said FHFA Acting Director Edward J. DeMarco. "I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative."
FHFA reportedly may include as many as 500 to 1000 in the first pool of the pilot phase. The GSEs have more than one million properties in their foreclosure pipelines.
Although the FHFA has not set a timetable for beginning bulk REO sales, government officials speaking on background with Inman News columnist Ken Harney said they may launch the program with a sale of 500 to 1,000 homes as early as this month.
The announcement by FHFA came just hours before President Obama was scheduled to make a major speech on housing policy.
From
Real Estate Economy Watch
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