Bulk Sales of GSE Foreclosures Begin


The Federal Housing Finance Agency (FHFA) today invited investors interested in purchasing pools of Fannie Mae, Freddie Mac and FHA foreclosures in the nations hardest-hit metropolitan areas with the requirement they rent them for a period of year to pre-qualify.

The new bulk sales program, under discussion since August, will begin with a pilot program where 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.

The purpose of the pilot phase will be to examine investor interest in various types of assets, including the location, size, and composition of pools of assets; the ways in which investors maximize the participation of experienced local firms and organizations that can provide the types of services and support needed to ensure community stabilization; the types of structures and/or financing that improve returns to the sellers as well as home values in impacted markets; and the process by which investors are qualified to and ultimately participate in the sales transactions.

FHFA said today it is also looking at ways to improve REO sales to homeowners and small investors, enhancing the existing retail sales strategy at Fannie Mae and Freddie Mac. Both companies sell the majority of their REO properties to owner-occupants at close to market value.

“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” said FHFA Acting Director Edward J. DeMarco. “I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative.”

FHFA reportedly may include as many as 500 to 1000 in the first pool of the pilot phase.  The GSEs have more than one million properties in their foreclosure pipelines.  Although the FHFA has not set a timetable for beginning bulk REO sales, government officials speaking on background with Inman News columnist Ken Harney said they may launch the program with a sale of 500 to 1,000 homes as early as this month.

The announcement by FHFA came just hours before President Obama was scheduled to make a major speech on housing policy.

About Author

Steve Cook is the editor of Real Estate Economy Watch and writes for a several leading outlets in addition to BiggerPockets, including Equifax and Total Mortgage. He also provides communications consulting services to leading real estate companies. Previously he was vice president of public affairs for the National Association of Realtors.


  1. This is a tremendous opportunity, but what is the criteria to be invited to this investment pool opportunity? How can investors get involved in this pool? Would love to know how to get my foot in the door.

  2. I don’t like it. The investor is responsible for management and servicing the properties and gets a possible equity upside.

    The government sounds like they want to get unrealistic prices and then make the investors do all the work.

    Seeing the inner working of the government over the last few years the last thing I want is a partnership with them.Could you imagine trying to exit that nightmare if the arrangement went bad?? You think getting out of regular partnerships is bad. I just don’t think it will be the great answer to everything people are hoping for.

  3. You have to either be a company with $5M in assets or be an accredited investor to qualify. Unfortunately it looks like you cannot even see what the program details are until you qualify. So if there are any accredited investors looking at this I am sure we would all be happy to know the details. So much for transparency in government.

  4. 5M plus or makes over 200k/year or networth >1M. That doesnt sound like a little investor to me…Sounds like big investors partly responsible for the mess. Ah, well, this wasn’t part of my investment strategy anyways, so good thing the shiny objects arent turning my head.

  5. May be worthwhile to provide an update. See HR 5823 that has been drafted and introduced by California’s representatives. The bulk sale will drive down housing values in California. Currently, there is a natural inventory shortage. We don’t need to fire sale homes to get housing action. It is not a one-size (or state) fits all solution. Federal Government representatives again thinking they know what is best for the states. Follow events at govtrack.us.

  6. Pingback: Are Cash Buyers Ruining The Housing Recovery? | Do Hard Money | ...

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