C.A.R. understands that some cities across the country may benefit from the bulk sale of REO properties, however, the Association feels that housing regulators have not appropriately analyzed proposed pilot cities.  Los Angeles and the Southern California region have been named as a potential pilot program location. However, these areas are experiencing an inventory shortage and many homes for sale, especially distressed properties, are receiving multiple bids.  Removing REO inventory through a bulk sale and rental program would hurt these communities.  In addition, taxpayers will lose because these REOs will be sold for less money in bulk sale than if sold as individual units.

While the nation continues to face its most difficult housing crisis since the Great Depression, C.A.R. hopes FHFA and HUD will withhold or delay the release of their REO bulk sale initiative in California’s housing market.

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The REO Initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years. This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, and provide additional rental options to certain markets. Prequalification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing downturn.

During the pilot phase, Fannie Mae will offer for sale pools of various types of assets including rental properties, vacant properties and non-performing loans with a focus on the hardest-hit areas. The first transaction will be announced in the near-term.

California’s housing market is unique.  California has an extremely low REO inventory where REO sales are getting top dollar in multiple offer situations.  On average, REOs are sold are sold in less than 60 days.  Bulk sales in California not only would have a negative impact on home prices, but would also push down home values for existing homeowners in those communities.  C.A.R. is asking that the Federal Housing Finance Agency, Dept. of Treasury, and Dept. of Housing and Urban Development consider this program only in areas where REO inventory is abundant and selling in bulk makes sense.

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Converting home equity into cash has been a challenge for homeowners since the real-estate downturn, but a growing number of lenders are quietly reviving a loan for seniors that does just that: The reverse mortgage.
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http://online.wsj.com/article/SB10001424052970204542404577158990079313270.html?mod=WSJ_RealEstate_LeftTopNews

The December Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:

• More than 5.5 million modification arrangements were started between April 2009 and the end of November 2011 – including more than 1.7 million HAMP trial modification starts and more than 1.1 million FHA loss mitigation and early delinquency interventions.
• Nearly 910,000 homeowners have received a HAMP permanent modification to date, saving an estimated $9.9 billion in monthly mortgage payments. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 2.6 million proprietary mortgage modifications through November.

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The Obama administration’s initial foreclosure-prevention programs were intended to help 7 million to 9 million people.  So far, they’ve aided about 2 million, and not all of those are out of foreclosure danger.

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http://www.usatoday.com/money/economy/housing/story/2011-12-11/foreclosure-aid-program-what-went-wrong/51815400/1