HR 5823 introduced in US Congress to stop bulk foreclosure sales

Congressman Gary Miller (R-Brea) and several other congressional members have introduced legislation that calls for the Federal Housing Finance Agency (FHFA) to cease its plan to sell Fannie Mae-owned foreclosed homes in California to large investors. Cathy Haney, an Orange County real estate broker, provides a summary.

H.R. 5823, "Saving Taxpayers from Unnecessary GSE Bulk Sale Programs Act of 2012," prevents the FHFA from implementing an initiative to sell Fannie Mae real estate-owned (REO) properties in California to institutional investors.

The bill was introduced as many industry veterans and realtors believe that the bulk REO sales program would negatively impact the housing market in California and potentially further delay a housing recovery.

The California Association of Realtors believes bulk REO sales are not necessary in California because housing inventory is extremely low and demand is high.

According to C.A.R. data, sales of bank-owned homes are closing in an average of less than 60 days – and often above the list price – without government intervention.

The FHFA pilot program calls for the sale of more than 400 Fannie Mae-owned foreclosed units in Los Angeles and Riverside counties to institutional investors.

According to an early summary of the units in Los Angeles and Riverside, approximately 80 percent of the properties were already rented. Interested investors were invited to prequalify for the program beginning back in February of this year.

(source: OC Register)

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