Banks, automobiles and now homes- Is the government going into the real estate business?

October 24, 3:27 PM Wake County Independent Examiner Stephanie Avery 

I recently read a blog on ActiveRain, a networking site for people in the real estate business. An agent in Las Vegas wrote

Fannie Mae is gobbling up most of the homes that are being sold at sheriff sale here in Las Vegas. They normally purchase the property and then hand it over to a real estate brokerage to manage it. In some cases they do not evict the home owner - instead they send out a form letter asking if there is a renter in the home and if they renter wants to keep on renting they have the option to do so. I have seen this form letter about ten times this past week. 

Normally when a home goes into default, the owner is presented with a Notice of Sale, and the property is sold on the steps of the courthouse where the property is located. At the sale, the property is auctioned in public with an opening bid equal to the outstanding loan balance, interest accrued, and any additional fees. If there are no bids higher than the opening bid, the property will be purchased by the lender. Most times the lender will contract a real estate agent to sell the home, also known as an REO or bank owned home.

 Another real estate agent in Vegas stated Fannie seems to have interest in the appliance industry as well. After a recent appraisal of a home he represents the buyer for, he wrote

Appraisal conditions required a few repairs like a window, toilet leak, and a working range. We went back to the seller letting them know that the buyer will buy the range from a big box company like Sears and have it installed by them ASAP. Fannie Mae would have nothing of it. They sent a list of appliances to choose from and said that my buyer needs to get one of those.

Is Frannie the owner or insurer of these properties and 'sitting' on them until the properties are worth more? Or are they investing in foreclosed homes owned by other banks? The government owns the loans, the banks and now the houses. And using TARP money to help buy back their assets at a very cheap price. Where does this leave the homeowner? The one that I thought was supposed to benefit from the stimulus.

Unique Global Estates recently published their newsletter stating "foreclosures were now advantageous to the banks" and posted Indymac Bank's shared loss agreement. An excellent question was posed by CEO Donna Lee Laue,

...millions of American homeowners are being forced out of their homes through foreclosure, only to have the banks put them up for auction for pennies on the dollar. Why weren’t these homeowners offered the same opportunity?

Comments

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