Investors Get Ready for FHFA's Foreclosure Bulk Sales
February 16, 2012
The Federal Housing Finance Agency announced it will soon be piloting a foreclosure-to-rental program, in which it’ll offer qualified investors the chance to buy a pool of foreclosed homes all at once as long as long as they agree to rent the properties for a specified period.
The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, says Fannie will be debuting the program, with pools of its properties available in some of the hardest hit areas by the foreclosure crisis. Freddie Mac and FHA loans may be considered later.
The program is aimed at preventing further price depreciations in communities where foreclosures have soared in recent years.
“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” Edward J. DeMarco, FHFA acting director, said in a statement.
Although FHFA has declined to comment yet on the precise size of the pool of foreclosed properties that will be offered, officials have indicated that the pilot program will be small compared to retail REO transactions.
At the end of September, Fannie and Freddie owned about 180,000 homes. “Even at 1,000 homes apiece, it would take more than 200 mega-investors to work their way through the current backlog,” an article at AOL Real Estate notes.
Source: “Foreclosure Fire Sale: Will Bulk ‘REO to Rental’ Program Fly?” AOL Real Estate (Feb. 15, 2012) and Federal Housing Finance Agency
Updated: June 25, 2018