A Bloomberg report has claimed Fannie Mae is capitalizing on rising house prices by selling more of its foreclosed properties to investors. In so doing, Bloomberg claimed the mortgage giant was curtailing homebuyers’ access to cheap housing.
According to Bloomberg figures, Fannie Mae last year sold 55 percent of its repossessed homes to individuals, non-profits and local governments, down from 57 percent in 2012 and 59 percent two years earlier.
The Bloomberg report claimed investors are snatching up Fannie Mae foreclosed properties to rent or flip, at the expense of owner-occupants.
“I’ve told my clients they should not go that route at all. It’s too hard to compete for homes,” Atlanta Realtor Teresa Huber told Bloomberg.
Fannie Mae and Freddie Mac offer a First Look program, which puts owner-occupants at the front of the line for new housing, but industry experts have told Bloomberg the 20-day head start does little to help owner occupants, non-profits and public entities since properties hit the market at too high a price point.
“The first-look program almost becomes moot because the homes are priced too high right out of the gate,” Phoenix real estate broker Gail Buck said. “By the time the property gets reduced to what it’s worth, now you are past the first-look program and owner-occupants are competing with investors.”
Fannie Mae is backtracking on its goal to increase homeownership as it increasingly sells foreclosed properties to investors, it has been claimed.