About 20 California congressional lawmakers have joined forces to urge the Federal Housing Finance Agency to not conduct an REO pilot program in the state, arguing that it would harm the state’s housing recovery.
The lawmakers sent a letter to FHFA Acting Director Edward DeMarco saying such a program would increase the losses to taxpayers and the government-sponsored enterprises.
The FHFA launched an REO sales program in February, in an attempt to unload the high inventory of foreclosures held by Fannie Mae and Freddie Mac through bulk sales to investors. California holds the highest number of Fannie Mae’s REO inventory, with nearly a quarter of its REOs located in that state alone.
The California Association of REALTORS® applauded the lawmakers for speaking out against REO sales program. CAR has been a critic of the program, saying that housing inventory in the state is very low and demand is high. Such a program would do more harm than good, the association argues. According to CAR, REO homes have been attracting multiple offers and are closing in less than 60 days on average, and often above the list price. CAR officials argue a government intervention is not needed.
“Carrying out this plan in California would potentially further delay a housing recovery and ultimately result in greater losses for the taxpayer,” says CAR President LeFrancis Arnold