Last week the National Association of Hispanic Real Estate Professionals called on lawmakers in Congress and government officials to reverse investor-favored policies that have created an imbalance in housing inventory and unfavorable conditions for Hispanics and other first-time homebuyers.
Executives of NAHREP specifically cited Fannie Mae and Freddie Mac REO to Rental programs that eliminate affordable housing stock from the market and fuel an unfair race between owner-occupant buyers and investors. The programs, they say, create large investor-controlled housing markets and undermine the economic stimulus and recovery owner-occupant buyers can bring to the U.S. economy.
In 2012, investors purchased 50 percent of all homes selling for $250,000 or less, with the majority of these transactions driven through bulk sales, auctions and drop-bid trustee sales, according to NAHREP leaders. The net effect of the trend will turn owner-occupant neighborhoods into renter communities.
The “Problem” with Investors
“Wall Street wins again! Hundreds of thousands of residential properties are being purchased by large investors through channels that are unavailable to owner-occupant buyers,” said Juan Martinez, NAHREP President. “With new housing construction still at a low and buyer demand on the rise, these programs have eliminated housing stock from the owner-occupant market at a time when first-time homebuyers can buy affordable housing at low interest rates.”
More than 90 percent of all foreclosed homes in the Phoenix area in 2012 were sold to investors when agents in the market report having 10 fully qualified buyers for every home listed in the market by an agent, say Hispanic real estate leaders. NAHREP agents report similar trends in other markets like Las Vegas, Miami, Sacramento, Los Angeles and the Inland Empire (east of LA).
“Failure to provide home buying opportunities to some of the most important growth segments of our nation – such as the Latino community – not only jeopardizes economic growth for our nation, it compromises the long-term financial stability of a generation,” said Martinez.
As part of its call to action to policy makers, Hispanic real estate leaders also recommend balanced mortgage credit rules that do not restrict access to credit, changes that support the health and solvency of the FHA fund and sensible immigration reform that preserves the nation’s labor pool and provides a route to citizenship for undocumented individuals and their children.
Requests from the NAHREP
NAHREP is asking the White House and policy makers on Capitol Hill to urge regulators at FHFA, OCC and HUD to make owner occupant sales of REO properties and short sales a national priority. Specifically NAHREP recommends:
- HUD require foreclosed properties on notes that have been sold through the Distressed Asset Stabilization Program to follow the same First Look policies that FHA REO protocols require
- Federal Housing Finance Agency discontinue the REO to Rental program in markets where property values increased in 2012 or where for sale inventories have fallen below historic levels
- Office of the Comptroller of the Currency to track and publish owner occupancy sale percentages on foreclosed properties including properties sold at trustee sales or where the servicing of the loan has been made to a non-regulated third party servicers
The National Association of Hispanic Real Estate Professionals, a non-profit 501c6 trade association, is dedicated to increasing the homeownership rate among Latinos by educating and empowering the real estate professionals that serve them. Based in San Diego, NAHREP is the premier trade organization for Hispanics and has more than 20,000 members in 48 states and 50 affiliate chapters.
Photo: Editor B