America’s Federal Housing Finance Agency has approved a giant residential real-estate auction at Fannie Mae (the Federal National Mortgage Association) to help the mortgage giant unload its inventory of 122,616 foreclosed houses. No date has been set yet for the ground-breaking auction but, for the first time, the U.S. regulators are also going to allow Fannie Mae to sell houses in bulk. The test sale also will include pools of non-performing loans.
Corporate bidders will have to have at least $5 million in assets to take part in the pilot sell-off and private individuals will be allowed into, provided that they have an income of more than $200,000 pr annum. Private couples will need to have a combined income of more than $300,000.
All of the bidders will have to have a proven track record as successful landlords because the properties purchased cannot be flipped says Fannie Mae. Buyers will also have to rent out the houses for a yet unspecified term of years. Many of the houses to be included in the test auction are occupied by tenants. These are persons who had been renting the units when their landlords defaulted on the property’s mortgage. Federal and state laws protect them from eviction.
More information about bidder registration, is available on the FHFA’s Website (www.fhfa.gov), under the REO Asset Disposition link. According to the FHFA site, the assets in the pilot auction will come from areas hard-hit by the downturn such as Atlanta, Chicago, Detroit, Fort Lauderdale, Las Vegas and Los Angeles.
Fannie Mae is a government-sponsored enterprise chartered by Congress to keep money flowing to mortgage lenders, to help strengthen the U.S. housing and mortgage markets, and to support affordable homeownership.
It describes itself as “a national mortgage finance company that doesn’t offer home loans. We stand behind mortgage lenders – local and national banks, thrifts, credit unions, and other financial institutions in all 50 states – to securitise or buy the mortgage loans they originate, enabling them to replenish their funds so that they can lend to other homeowners. Similarly, we work to keep funds flowing to support affordable rental housing.”
“Our mandate is to keep money flowing to mortgage lenders and to make sure people can buy or rent housing. We have one of the largest foreclosure prevention operations to help struggling homeowners keep making their mortgage payments and avoid losing their homes.”