FHFAs Foreclosure Bulk Sales to investors
The Daily Real Estate News reported today that the Federal Housing Finance Agency is planning a program to attempt to prevent further price drops in communities where foreclosures have been soaring in recent years.
The program is getting qualified investors to buy pools of homes but not to sell. They will require them to rent them for a specific period of time and not flip them. By doing this they will be taking them off the market, not showing an individual value because they would be buying in a bulk of 100’s or 1000’s homes.
This pilot program would keep home prices from dropping; supply extra rentals, and stabilizing communities. It is a small program compared to the retail REO sales. Fannie Mae and Freddie Mac own about 180,000 homes so it could take a large number of private investors with a lot of money.
Federal Housing Finance Agency regulates both the Fannie Mae and Freddie Mac and the program will be for areas hit the hardest in past years.
There are still lots of Mom and Pop investors who like the prices being low and interest rates around 4%. Rental market is up and rents are up. Lots of renters who don’t have the money to put down or have had a Short Sale or Foreclosure of their own who cannot buy due to FICO score damage. Even young professionals getting started wanting to rent for now paying off their student loans. If you are an investor and pay cash, after expenses you could be earning 8% return on your money. A lot better than CD returns, Mutual funds and lots of stocks.
Personally I think the program could work, what are your thoughts?
Marlene, Tony & Mike
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