FHFA sells 699 Fla. REOs to investor

By
Real Estate Agent with Downing-Frye Realty, Inc. Naples, FL

Reposted with permission...

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FHFA sells 699 Fla. REOs to investor

WASHINGTON – Sept. 11, 2012 – A controversial move to sell 699 Fannie Mae- and Freddie Mac-owned homes in bulk to an investor was closed last week, according to the Federal Housing Finance Agency (FHFA). Pacifica Companies LLC purchased the homes as part of a real estate owned (REO) pilot initiative.


Pacifica has not released details on how it will oversee the properties. Based in San Diego, the company’s website claims it has an office in Tampa, as well as Austin, Texas; Riverside, Calif.; and four cities in India.

Pacifica paid $12.3 million upfront in a joint venture agreement. It will pay an additional $49.3 million by sending Fannie Mae 90 percent of future proceeds. After that, Pacifica will collect a 20 percent management fee and pay Fannie Mae 50 percent of future proceeds. FHFA projects the total value of all payments to be $78.1 million. The total price paid by Pacifica doesn’t represent a significant discount; however, the relatively low downpayment and profit-split deal would make it attractive to most investors.

“When FHFA proposed this program, the nation was worried about an onslaught of distressed home sales and too few buyers,” says Florida Realtors’ Senior Vice President of Public Policy John Sebree. “However, NAR and Florida Realtors have always taken the position that Realtors know their neighborhoods and are in the best position to move REOs into the hands of buyers.”

The Florida REO sales impacted homes throughout the state, including Central and Northwest Florida, Southeast Florida and the West Coast. It’s still unclear if Pacifica agreed to rules regarding a future sale. NAR says it’s setting up a meeting with FHFA to find out more details.

“Going forward, FHFA, Fannie Mae and Freddie Mac may decide that we no longer need bulk sales to investors,” Sebree adds. “Florida buyers are coming out in force and many say they now face multiple bids and a limited inventory of homes to consider. If we do discover any problems with the current deal, it will hopefully be an isolated incident.”

Alan Zibel, a writer for The Wall Street Journal, thinks Fannie Mae may focus now on sales to single buyers because it’s more profitable. “In the second quarter of this year, (Fannie Mae) recovered 59 percent of outstanding mortgage balances” when it sold a REO, Zibel says, “compared to 54 percent a year earlier.”

© 2012 Florida Realtors®

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Home Buying
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Florida
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florida reo sales

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Additional Information

Bob Pisa Downing-Frye Realty

Outstanding Performance Award: 2011
Top Performance Award 2012
Gulfshore Life Magazine Five-Star Award: 2010, 2011, 2012, 2013

Author Bio: Bob Pisa moved to the Naples area after spending 30 years in the Boston area. He was raised in the metro-NYC area and graduated from the Rochester Institute of Technology (Rochester, NY) in 1974. His career has been primarily in high-technology manufacturing and enterprise software for multi-national companies. Bob was also a successful small business entrepreneur and ultimately sold his start up business after six years of operation to a major corporation. He is the former Vice President for the Grandezza Master Homeowner's Association (two terms) and former President of the Santa Lucia Homeowner's Association (three terms.) Bob attained his real estate license in 2005, and is working in commercial and residential real estate. He is a member of Naples Area Board of Realtors®, NAR, and Florida REALTORS.