California lawmakers object to bulk REO-to-rental sales
Letter to Fannie and Freddie regulator: Not in our backyard
By Inman News, Tuesday, April 10, 2012.
Nineteen members of California’s congressional delegation object to Fannie Mae and Freddie Mac selling foreclosed properties in their state to investors in bulk for conversion to rentals.
Fannie and Freddie’s federal regulator, the Federal Housing Finance Authority (FHFA), has said it will approve bulk sales only in markets where there’s a glut of properties on the market.
The first “REO to rental” sale of 2,490 Fannie and Freddie “real estate owned” (REO) properties will be limited to eight markets: Atlanta (572 properties); Los Angeles-Riverside, Calif. (484 properties); Phoenix (341 properties); Las Vegas (219 properties); Chicago (99 properties); Southeast Florida (418 properties); Central and Northeast Florida (190 properties); and Western Florida (167 properties).
“In California, there is no question that disposing properties through bulk sales will yield a lower return for (Fannie and Freddie) and taxpayers than through traditional disposition methods,” California lawmakers said last week in a letter to Edward DeMarco, FHFA’s acting director.
The California Association of Realtors welcomed the letter, saying lawmakers “clearly understand that this program may be a viable solution in states where there is a large inventory of unsold foreclosures. However, carrying out this plan in California would potentially further delay a housing recovery and, ultimately, result in greater losses for the taxpayer.”
See More: Letter to Fannie & Freddie