Fannie faces glut of unsold homes
Mortgage giants own 44 percent of foreclosed homes
By Bob Ivry and Sharon L. Lynch | Bloomberg News
August 3, 2008
Fannie Mae, the largest U.S. mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Mich. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000. He still couldn't sell it.
"There's oversupply," Megie said.
As home prices decline, unsold properties are a problem for creditors like Fannie Mae because taxes, insurance and repairs drain their cash. Fannie Mae acquired twice as many homes through foreclosure as it sold in the first quarter, regulatory filings show, and late payments on its home loans—a harbinger of foreclosures—almost doubled in the past year.
...
Fannie Mae's goal in selling its properties is to get the highest possible price, even if it means hanging on to them longer, said Gabrielle Harrison, a vice president at the company.
"We want to treat that home as if it was your own, or as if you were living next door to it," Harrison said. "You wouldn't want that home to bring down your property value."
They obviously don't understand that by holding the price, the inventories will only continue to grow!
Ugh.
