{ REO Bulk Sales of Nearly 500 Fannie Mae-owned Foreclosed Homes }

As a real estate broker in California, I receive regular updates from the California Association of Realtors (CARS) about the housing market. This week I was shocked to see what was in my inbox. CARS has been fighting a battle with the Federal Housing Finance Administration (FHFA) and Fannie Mae about selling off their REO homes in bulk sales and to undisclosed investors at deep discounts. The issue is with the sale of about 500 Fannie Mae-owned foreclosed homes in the Los Angeles and Inland Empire to undisclosed institutional investors, it negatively affects the California’s state housing market and will burden taxpayers with Fannie Mae’s loss. (CARS Newsletter). Moreover, their actions are affecting markets that have actually seen the increase of sales of homes and price stabilization over the last three years. (CARS Newsletter).

If you have looked into purchasing a home lately, you will know that these areas in the southern California area are experiencing a strong housing/buyer demand with very little homes for people to purchase from. The low availability of actual homes to purchase with the high demand to buy keeps housing prices high (lower prices than we have seen in the past but keeping the prices high helps current home owners who have purchased in the past when housing prices were even higher). With the bulk REO sales, it is predicted that the prices of the houses will fall dramatically due to the increase supply of homes. Currently, Fannie Mae is slowly releasing their REOs and I believe they should continue to do so. Their bulk sale will change our already ever changing real estate market. It will likely be a benefit to anyone who would like to purchase a home within the next few years but it will affect so many who have purchased already. It will perhaps even affect those who just purchased recently.

As an economics major in undergrad and an attorney, I am still baffled at the fact that California congressional leaders cannot comprehend some of the basic supply and demand principles that are fully explained in detailed to them and the consequences of their actions. Perhaps the leaders have another insight that we just do not see. But as of now, even as an attorney, one can feel helpless.

Katie Bayliss, Esq.
Katie B Realty