The Federal Housing Finance Agency (FHFA) has targeted Los Angeles as one of the hardest-hit areas for inclusion in its Real Estate-Owned (REO) Initiative pilot program.
Under the pilot plan, institutional investors will be able to purchase large blocks of Fannie Mae- and Freddie Mac-owned foreclosed properties in bulk with the requirement to rent the purchased properties for a specified period of time.
While the program may be beneficial in some parts of the country where REO inventory is high, it would not be favorable in California, where housing inventory is extremely low and demand is high, even in the state’s hardest-hit areas. REOs in California are getting multiple offers at top dollar and usually closing within 60 days on average.
C.A.R.’s Leadership Team is meeting with California Congressional members, the FHFA, and FHA in Washington, D.C., this week to voice its concern with this issue and to determine how C.A.R. can assist the housing regulators in the disposition of REOs.