After years of laser focus on underserved borrowers, the top lender is taking the next step in the journey
The firm expects to emerge from Chapter 11 by the end of January
Cash has been king since 2008 when the market crashed. Because so many toxic banks were taken over by the FDIC, they established various bidding platforms whereby assets are bundled and then offered for sale to qualified, registered bidders.
The Federal Housing Finance Agency (FHFA) regulates Fannie Mae and Freddie Mac, two government-owned organizations backing most home loans in the United States. It has announced that new regulations will become effective on November 1, and the goal is to simplify the process of making a short sale. When such a transaction takes place, the mortgagee allows the borrower to sell their home for less than they owe on their mortgage as a way of avoiding foreclosure.
As the auction market at the courthouse steps for trustee sales has gotten more and more crowded, many investors are starting to turn their attention to the short sale market. The increased competition is causing prices to be bid up to levels where reward no longer makes as much sense as it once did for auction buyers.