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September 30, 2014

REALTOR® Groups Speak Out Against Bulk REO Sales

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REALTOR® Groups Speak Out Against Bulk REO Sales

The California Association of REALTORS® is calling for a change in leadership at the Federal Housing Finance Agency, mostly stemming over its pilot bulk sales foreclosure program, which CAR has called harmful to the housing recovery. 

CAR’s latest objection stems from the federal government’s Nov. 5 sale to investment firm Colony Capital, which took ownership of 970 foreclosed homes in California, Nevada, and Arizona in a recent auction. Colony Capital had the winning bid of $176 million for the Fannie Mae properties. 

"Fannie Mae and FHFA's decision to move forward with the REO bulk sale in California amounts to another gift to Wall Street at the expense of taxpayers," says LeFrancis Arnold, CAR’s president. "The deal, which calls for the sale of more than 400 foreclosed homes in Los Angeles and the Inland Empire, not only hurts taxpayers and prospective home buyers, but will also delay a full recovery in the housing market." 

FHFA, which oversees Fannie Mae and Freddie Mac, initiated the bulk sales program to help unload the high number of foreclosed homes in its books.

But the National Association of REALTORS®, along with other REALTOR® groups like CAR and associations in Florida, have spoken out against the bulk sales program. They have argued that with inventory levels of for-sale homes so low and home buyer demand increasing that such a program is unnecessary. 

"Buyers are having a hard time getting into the market because there aren't enough homes to meet demand,” says Suzanne Yost, president of the Silicon Valley Association of REALTORS®. “By going forward with bulk sales of foreclosed properties, investors will be buying homes and holding them until prices appreciate further. These are homes that are affordable now for first-time buyers but may not be when prices have gone up.”

Source: “REALTORS® Object to Bulk Foreclosure Sales, Call for Leadership,” Silicon Valley Community Newspapers (Nov. 12, 2012)

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