Freddie Mac Announces REO Auction Blitz Ahead of Tax Credit Deadline

Freddie Mac is riding the wave of the homebuyer tax credit, hoping it will be incentive enough to entice deal-seekers to snatch up foreclosed properties it has repossessed in the hard-hit Las Vegas and Southern California markets and put a dent in the GSE’s swollen inventory of REO properties.

Freddie officials announced Thursday that in conjunction with the California-based asset management firm New Vista, the mortgage giant plans to auction off hundreds of HomeSteps REO properties to individual homebuyers in Las Vegas on April 24 and in California’s Inland Empire on April 25. HomeSteps is the real estate sales unit of Freddie Mac and markets a nationwide selection of Freddie Mac-owned homes.

The GSE explained that the auction blitz is in support of the federal Neighborhood Stabilization Program (NSP), established for the purpose of stabilizing communities riddled with distressed properties. Under NSP, homebuyers are eligible for closing costs and downpayment assistance when they buy foreclosed or abandoned homes in designated communities that were hit hard by the housing downturn.

Freddie says this federal assistance combined with the federal tax credit will provide buyers with “significant financial advantages” in purchasing HomeSteps homes.

“Freddie Mac’s first-time homebuyer auctions in Las Vegas and in California’s Inland Empire builds on our long-standing effort to use our REO inventory to foster new

opportunities for new homeowners and shows another way Freddie Mac is working to achieve the Obama Administration’s goals of stabilizing and reviving impacted communities,” said Ingrid Beckles, SVP of default asset management at Freddie Mac.

The Las Vegas and Inland Empire community auctions for first-time homeowners and borrowers currently eligible and approved for the NSP program are scheduled for the mornings of April 24 and 25. HomeSteps and New Vista plan to hold separate afternoon auctions for bidders who do not qualify for the NSP program but intend to occupy the homes as their principle residences.

Freddie says that by scheduling the auctions for the last week of April, it’s making it possible for bidders to still qualify for the federal home purchase tax credit, which requires buyers to ink their names to a contract by April 30.

“Together with today’s low mortgage rates, these April auctions will enable Las Vegas and Inland Empire families to take advantage of the unique convergence of opportunities that make HomeSteps homes exceptionally attractive values,” said Chris Bowden, VP of HomeSteps.

Homebuyers at the NSP auctions will also benefit from HomeSteps’ SmartBuy program, which pays up to 3.5 percent of the closing costs and provides for a two-year limited home warranty on homes sold as primary residence when the purchase price is equal to or greater than $25,000.

Freddie Mac explained that the HomeSteps homes to be auctioned have been removed from the market, inspected, repaired, and are ready for sale in “as is” condition.

“Owner-occupants are the key to revitalizing and strengthening neighborhoods that have been hard hit by the economy,” said Jim Park, CEO of New Vista. “Working with Freddie Mac, New Vista has created a one day homebuyer event that gives first time and owner occupant buyers an exclusive opportunity to purchase HomeSteps homes. These unique events will help turn hundreds of foreclosed properties into homes for many deserving families.”