California Realtors Slam FHFA Over "Highly Secretive" REO Program

By: MortgageOrb.com

The California Association of Realtors (CAR) has criticized the Federal Housing Finance Administration (FHFA) for moving ahead with its real estate owned (REO) bulk sales pilot initiative in a manner that the trade group refers to as a "highly secretive manner, despite vehement opposition from California congressional members, the negative economic impact to the state’s housing market, and cost to taxpayers."

CAR adds that it is filing a request for details through the Freedom of Information Act. The REO bulk sales pilot program calls for the sale of nearly 500 Fannie Mae-owned foreclosed homes in the Los Angeles and Inland Empire areas to yet undisclosed institutional investors.

"We are disappointed that Fannie Mae and the FHFA fail to understand that this initiative will harm the communities in which it will be implemented and are going forward with this ill-conceived plan," says CAR President LeFrancis Arnold. "Moreover, not only are Fannie Mae and FHFA moving forward with the plan, they are refusing to disclose any details, such as property locations, final property count, sales price or names of winning bidders.

"We are also greatly concerned that the FHFA used extremely outdated market data, perhaps as old as [from] 2011, to determine property valuations," Arnold continues. "Because the transactions are only now in the process of closing, these dated valuations will drag down the Inland Empire’s home prices, which have shown strong signs of stabilization. Additionally, because of this price discrepancy and the very nature of bulk sales, we believe Fannie Mae is assured to not receive fair market value for the properties, thereby saddling taxpayers with their loss."