Realtors accuse Current Administration of secret bulk sales

According to the California Association of Realtors (CAR), the Federal Housing Finance Administration (FHFA) is moving ahead with its REO bulk sales pilot program, and it’s doing so in a secretive manner “despite vehement opposition from California congressional members, the negative economic impact to the state’s housing market, and cost to taxpayers.”




CAR’s complaint applies only to California, but FHFA has also offered bulk homes for sale in Florida. In July, for example, it announced that 775 homes – 190 in Central and Northwest Florida, 418 in Southeast Florida and 167 on the West Coast – had winning bids from buyers, and it expected to close within a few weeks.



Florida Realtors has expressed concerns to The National Association of Realtors® (NAR) about the issue and is requesting member feedback on how the FHFA bulk sales issue affects the Florida market.



The REO bulk sales pilot program covers a number of U.S. cities, but CAR’s complaint specifically looks at 500 Fannie Mae-owned foreclosed homes in the Los Angeles and Inland Empire areas sold to undisclosed institutional investors.



“We are disappointed that Fannie Mae and the FHFA fail to understand that this initiative will harm the communities in which it will be implemented and are going forward with this ill-conceived plan,” says CAR President LeFrancis Arnold. “Moreover, not only are Fannie Mae and FHFA moving forward with the plan, they are refusing to disclose any details, such as property locations, final property count, sales price, or names of winning bidders.”



C.A.R. says it’s filing a request for details through the Freedom of Information Act.



The FHFA, Fannie Mae’s conservator, announced earlier this summer that winning bidders in the foreclosure auction had been chosen, with transactions expected to close in the third quarter. In July, Fannie Mae created an LLC in California, called SFR 2012-1 US West LLC, to transfer the foreclosed properties from Fannie Mae to the LLC. It’s unclear whether the winning bidders will purchase the full LLC or only a share, thus splitting the ownership between Fannie Mae and the winning bidders.



“We are also greatly concerned that the FHFA used extremely outdated market data, perhaps as old as 2011, to determine property valuations,” adds Arnold. “Because the transactions are only now in the process of closing, these dated valuations will drag down the Inland Empire’s home prices, which have shown strong signs of stabilization. Additionally, because of this price discrepancy and the very nature of bulk sales, we believe Fannie Mae is assured to not receive fair market value for the properties, thereby saddling taxpayers with their loss.”



Arnold says that Wall Street investors don’t need government incentives to purchase properties by offering REOs at a discount. “Savvy individuals recognize that the California real estate market represents an unprecedented investing opportunity and are already acting on it in droves,” he says.



NAR voiced concerns to the Federal Reserve Board in March about REO sales to investors. NAR recommended that any REO bulk sales program be limited to small geographic areas that need alternatives to individual investors; and it should rely on the expertise of local businesses, nonprofit organizations and local government for implementation.



According to C.A.R., the California properties are in markets that have had stabilized over the last three years. The Inland Empire currently has a severe shortage of available housing, demand is strong, and REO listings sell in less than 30 days. The long-run average for unsold inventory in the Inland Empire is a 5- to 6-month supply, but it currently stands at 3.1 months in Riverside County and 3.8 months in San Bernardino.



© 2012 Florida Realtors®

While progress may be slow, all indicators point to a gradually recovering real estate market. Several markets are even reporting a shortage of available housing inventory, sparking price increases and bidding wars for the first time in many years. As the market reaches this critical turning point, brokers are presented with a ripe opportunity to gain ground and build revenue. With 2013 poised to be a break-out year for real estate, savvy brokers are positioning themselves to take back their markets and start growing business again. At RISMedia’s upcoming Real Estate CEO Exchange – taking place this September 5 and 6 at the Yale Club in New York City – leading brokers will discuss insider strategies for increasing business during these early stages of real estate recovery. See the full agenda and speaker line-up here. While progress may be slow, all indicators point to a gradually recovering real estate market. Several markets are even reporting a shortage of available housing inventory, sparking price increases and bidding wars for the first time in many years. As the market reaches this critical turning point, brokers are presented with a ripe opportunity to gain ground and build revenue. With 2013 poised to be a break-out year for real estate, savvy brokers are positioning themselves to take back their markets and start growing business again. At RISMedia’s upcoming Real Estate CEO Exchange – taking place this September 5 and 6 at the Yale Club in New York City – leading brokers will discuss insider strategies for increasing business during these early stages of real estate recovery. See the full agenda and speaker line-up here. This event will kick off with an Opening Keynote Address by HomeServices of America Chairman & CEO, Ron Peltier: “A State of the Industry Address: Taking Back the Real Estate Market.” During this keynote address beginning at 2 p.m., Peltier will offer an in-depth analysis of where real estate has been in the past five years, why we can begin to put the downturn behind us, and how savvy real estate professionals can break-out and start prospering in the industry’s “new normal.” Immediately following Peltier’s presentation, leading brokers from key regions across the country will provide their individual take on the state of the real estate recovery in their respective markets, and discuss how they’re turning the tables in their favor. During “Making Money in Your Market: Has Your Business Reached a Turning Point?”, brokers will drill down from the national perspective to discuss the specific challenges they are confronted with, and provide hands-on strategies for overcoming these challenges in order to run a profitable business in a recovering environment. This high-level discussion will be moderated by RISMedia President & CEO John Featherston and Chairman of the Board for Better Homes and Gardens, Mason-McDuffie Real Estate, Ed Krafchow. Market-leading brokers on the panel will be: Rei Mesa, president and CEO, Prudential Florida Realty and Florida Real Estate Services; Dan Forsman, president and CEO, Prudential Georgia Realty; Rich Rector, owner and president, Realty Executives; and Joseph Rand, managing partner, Better Homes and Gardens, Rand Realty. Designed specifically for a select group of broker/owners, brand executives and real estate leaders, RISMedia’s Real Estate CEO Exchange is by exclusive invite only. The event will welcome more than 100 of the most powerful and successful real estate brokerage leaders who hail from franchise brands and independent real estate firms located across the nation. These leaders will come together for this day-and-a-half-long event to exchange ideas and strategies to better meet the needs of today’s sophisticated consumer. At press time, these executives collectively employ 75,000-plus sales associates and are responsible for more than 400,000 transactions in 2011, representing approximately $175 billion in closed business.

FHFA Says Fannie, Freddie Will Not Reduce Mortgage Balances

 FHFA Says Fannie, Freddie Will Not Reduce Mortgage Balances Daily Real Estate News | Wednesday, August 01, 2012 The Federal Housing Finance Agency announced Tuesday that after several months of mounting pressure from the Obama administrator and lawmakers that the mortgage giants it regulates, Fannie Mae and Freddie Mac, will not lower the mortgage principal of underwater home owners. Its decision quickly drew criticism. The FHFA insists that through its own analysis it has concluded that reducing the mortgage principal of struggling home owners will not help prevent foreclosures nor save taxpayers money in bailout money to the GSEs. The Obama administration says it disagrees with the FHFA’s decision. Treasury Secretary Tim Geithner was quick to argue that a reduction of struggling borrowers’ loan balances by the FHFA could save taxpayers up to $1 billion. "I do not believe it is the best decision for the country," Geithner wrote to the FHFA shortly after it announced its decision. "You have the power to help more struggling home owners and help heal the remaining damage from the housing crisis." The government had committed to helping to cover some of the costs to implementing such a program if the FHFA would permit mortgage principal reductions to move forward. Yet, Edward DeMarco, the FHFA’s acting director, says that the FHFA has concluded after months of consideration that “the anticipated benefits do not outweigh the costs and risks” with mortgage principal reductions, and that the agency stands by its original decision to not permit it. DeMarco says that only about 74,000 to 248,000 home owners would be eligible for the principal reductions, but developing and implementing such a program would prove costly. Plus, about 11 million Americans are underwater on their mortgages so the program would only be able to help a small share. DeMarco also said he was concerned reducing the mortgage principal on some home owners’ mortgages would prompt other borrowers to fall behind on their payments so that they could receive similar treatment.

Daily Real Estate News

Wednesday, August 01, 2012