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.
5 comments:
This is what comes of government involvement in the housing market.
FNMA and other government-chartered mortgage agencies are technically private and for profit, but their stock has only been attractive to investors because of the implicit guarantee by the Federal government, which was made formal by the bailout that congress just engineered.
The tendacy to cling to losses and not mark these properties down to the prices where they will sell, is just one small indicator of the general incompetence of these agencies. Given the condition and prospects of Flint, MI, the agency would do better financially just to GIVE these properties away to anyone who wants to live in them, just to get them off their books and not be on the hook for the taxes, insurance, and maintenance.
just to get them off their books and not be on the hook for the taxes, insurance, and maintenance.
August 8, 2008 12:42 PM
==================
That's the catch. If you have been in any of these REO's then you know they are not maintaining them.
The city of Detroit ought to move on the REO banks and force them to ante up for taxes and maintenance, or give the properties up.
But I guess that Detroit's political non-leaders are too preoccupied with acquiring "bling" on the taxpayers' dime, and making bail to worry about the city's problems.
there was a song.....i think in the '70's......bette middler perhaps.
"it's my turn".
TIME TO BUILD WEALTH !
Post a Comment