As if Fannie Mae and Freddie Mac don’t have enough problems (or critics), the recent announcement that these two organizations made concerning their plan to sell 600 plus foreclosed homes in Southern California to investors in bulk continues to bring major criticism.
Edward DeMarco, acting director of the Federal Housing Finance Agency, continues to feel the heat from California congressional members. The plan is part of larger plan to sell almost 2500 properties in Fannie’s portfolio to investors with the stipulation that they convert the homes to rentals.
Nineteen California lawmakers don’t want the program in place, saying the move will further hurt the housing market and increase costs to citizens.
On the other hand, DeMarco says the program will help lift hard-hit communities from housing stress, according to a Feb. 1 written statement:
“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities. I am grateful for the collaborative effort by the many stakeholders including institutional investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative.”
Even the California Association of Realtors, who often take a quiet stance on issues with the banks and foreclosures, lobbied hard against this Fannie Mae program.
Let’s see how Fannie and Freddie work themselves from this firestorm.
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