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Nov 7 2012

C.A.R. Calls for New FHFA Leaders....

Posted by Suzanne Baker at 11:39 AM

Posted on | November 5, 2012 | 0 Comments

The Federal Housing Finance Agency’s decision to proceed with REO bulk sale transactions in California through private investors led California Association of Realtors to issue a call for a change of leadership at the FHFA.

On Nov. 1, FHFA reported that Colony Capital, a private-equity firm based in Santa Monica, had purchased an ownership stake in a portfolio of 970 foreclosed single-family properties in the states of California, Arizona and Nevada.

The FHFA, which regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks, and provides more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions, views the REO bulk-sales pilot program as a creative strategy to place foreclosed homes back into the marketplace.

The REO bulk-sale transaction, though, was couched in a much different light by C.A.R. president LeFrancis Arnold who described the initiative as, “Another gift to Wall Street at the expense of taxpayers.”

“The deal, which calls for the sale of more than 400 foreclosed homes in Los Angeles and the Inland Empire, not only hurts taxpayers and prospective home buyers, but will also delay a full recovery in the housing market,” Arnold said in a statement released today, Nov. 5.

A Colony spokesman, Owen Blicksilver, declined to comment on the statement or on terms of the FHFA pilot transactions involving REOs. The FHFA has called the REO pilot program a creative strategy to place foreclosed homes back into the marketplace.

The state trade association, though, has said the bulk sales will constrict an already “severe” shortage of homes to sell in California. Low inventory levels may drop even more, C.A.R. says, if homes purchased in bulk are rented out until home prices swing up to levels recorded before the Great Recession began.

Other firms named by the FHFA for the REO pilot transactions were: Pacifica Companies on 699 Fannie Mae properties in Florida and The Cogsville Group on 94 properties in Chicago.

 

 

     
   
 
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