Fannie Mae Hones "First Look" Program for REO Property Sales
By: Carrie Bay
Fannie Mae is tightening up its initiative to facilitate the sale of REOs to owner-occupants and entities using public funds, such as local housing and community development agencies.
Fannie Mae says these buyers bring permanency and stability to tenuous markets where swollen inventories of foreclosures have taken their toll, and the GSE is making some changes to ensure owner-occupants and public entities have “first look” at its REO homes.
Fannie Mae initially rolled out its First Look initiative last fall. Under the program, the GSE only considers offers from those seeking to purchase a home as their primary residence and public entities during the first 15 days that a property is listed.
Julia Dugger, Fannie Mae’s senior manager of marketing communications, says the program has seen a great deal of success throughout the country, and is accomplishing its mission of building stronger communities by ensuring the GSE’s repossessed homes don’t continue to sit vacant while an investor markets the property to potential tenants.
But Dugger explained to DSNews.com that the execution of the First Look program has been “tricky,” primarily because individual homebuyers and public entities usually can’t view multiple listing services (MLS), and consequently don’t know when the property they’re interested in was actually listed or when the 15-day First Look window ends.
To address this snag, Fannie Mae is making some changes to the program. Going forward, First Look will be tracked based on days listed on the GSE’s REO marketing site HomePath.com, as opposed to the MLS.
Properties in the First Look marketing period can be easily identified by the First Look logo. Fannie Mae also launched a new timer feature today on HomePath.com, indicating how many days remain in the First Look marketing period for each individual property.
Dugger said that with the countdown clock prominently displayed for each REO property for sale, Fannie Mae’s First Look is now completely transparent to anyone visiting the HomePath site – the selling agent, listing broker, or any interested buyer. Anyone on the GSE’s REO site will now be able to clearly see how many days remain under the First Look policy before the listing is opened up to investors.
“Everybody is now on a level playing field,” Dugger said.
Dugger says the First Look policy provides buyers looking for a primary residence with a “real opportunity” to find an affordable home without having to worry about being outbid by an investor.
Public entities, too, are taking advantage of the no-investor marketplace provided by First Look, particularly those agencies that have been awarded federal funding through HUD’s Neighborhood Stabilization Program (NSP) to purchase, rehabilitate, and resell foreclosed and abandoned properties.
More than 400 different entities around the country are using Fannie Mae’s First Look. Dugger says some 2,000 homes have been purchased through the program using NSP funds.
First Look has been so well received on both fronts that Dugger says Fannie Mae has been asked to extend the 15-day window by a number of lawmakers who agree that owner-occupancy homeownership is the key to rebuilding communities and stabilizing property values.
Senate Majority Leader Harry Reed is one of those lawmakers. Competition from investors is especially heavy in his home state of Nevada, where it’s been reported that at least 50 percent of foreclosure sales in some cities are cash-only transactions.
Beginning today, Fannie Mae is extending the First Look marketing period for its REO homes in Nevada from 15 days to 30 days. Dugger says the GSE may explore lengthening the timeframe in other areas as well.
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