Monday, September 19, 2011

Freddie Mac Not Allowing for Bulk Purchase of Foreclosures.


The Obama Administration, sent out a request for information asking for ideas that would help Freddie Mac, Fannie Mae & HUD shed its inventory of foreclosure homes.   Pools of investors approached Freddie Mac to purchase blocks of inventory homes @ 40 to 60 cents on the dollar.   Freddie Mac, however, is not considering any such discount pricing for these investors.

There are two sides to the argument.  Having investors purchase the volume of foreclosures in bulk transactions purges the inventory from the GSE which is a good thing.   However the investors are wanting it a deep discount, 40 to 60 cents on the dollar.   If a geographic area has a significant number of foreclosures that are purchased in bulk, it can further erode the value of all the homes in the area.

Freddie Mac, Fannie Mae & HUD position is to continue to focus on owner occupancy of its foreclosure inventory.

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