LOS ANGELES (CBSLA.com) — The Federal Housing Finance Administration is moving ahead with the planned sale of about 500 Fannie Mae-owned homes that have been foreclosed in Los Angeles and the Inland Empire despite protests from the California Association of Realtors.
According to CAR, the targeted properties are in markets that have largely stabilized over the past three years, including the Inland Empire, where listings are slim but demand is strong. Foreclosure listings in the area sell in less than 30 days.
“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,” CAR President Le Francis Arnold said. “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.”
According to CAR, the FHFA, Fannie Mae’s conservator, has announced that winning bidders in the foreclosure auction have already been picked, with sales expected to close in the third quarter.
“We are also greatly concerned that the FHFA used extremely outdated market data, perhaps as old as 2011, to determine property valuations,” Arnold said. “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 said investors did not need government incentives to buy properties at a discount and that savvy buyers realize that the California market represents a great opportunity.
The long-run average for unsold inventory in the Inland Empire is a 5- to 6-month supply but now stands at 3.1 months in Riverside County and 3.8 months in San Bernardino.
In May, Rep. Gary Miller, R-Brea, and colleagues introduced a bill aimed at stopping FHFA bulk sales in California to institutional investors.
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