Eight Republican and Democratic California congressional members are seeking to put a stop to the previously announce REO-to-Rental program and cease the plan to sell more than 600 Fannie Mae-owner foreclosed units in Los Angeles and Riverside counties.
The bill’s arrival comes on the heels of a letter Congressman Gary Miller, R-Brea, and 18 other California congressional members sent to the FHFA in April asking the agency to refrain from implementing its REO pilot program in the state. With the program, the FHFA intends in part to sell more than 600 Fannie Mae-owned foreclosed units in Los Angeles and Riverside counties to institutional investors.
The California Association of Realtors (CAR) applauds the new bill. It said the bulk REO sales program would negatively impact the state’s housing market and potentially further delay a housing recovery.
“We are hearing from our members that housing supply is extremely tight, with REO inventory being especially low at only a two-month supply,” CAR President LeFrancis Arnold says. “Consequently, California homebuyers already are competing with small investors and encountering multiple offer scenarios.”
Sales of bank-owned homes are closing in an average of less than 60 days — and often above the list price — without government intervention, CAR said.
In the letter, the 19 congressmen told FHFA Acting Director Edward DeMarco, “We are concerned that including California counties in this initiative is in direct conflict with your duty as conservator to preserve and conserve the company’s assets.”
“In California, there is no question that disposing properties through bulk sales will yield a lower return for the GSEs and taxpayers than through traditional disposition methods. This means that such a program will increase losses to the taxpayer and GSEs,” the letter stated.
Do you have any clients who have asked about the REO-to-Rental program? Are you hoping that the program continues or would you like to see it stopped as well?