Comments (13) | Add a comment
Program may level housing sale odds
Tools
LAS VEGAS REVIEW-JOURNAL
A pilot program from Fannie Mae could help level the playing field between cash-laden investors and owner-occupants bidding on low-priced foreclosure homes in Las Vegas, the president of a real estate organization said Thursday.
Fannie Mae is extending the "First Look" grace period in Nevada from 15 days to 30 days effective Monday. That gives buyers who plan to make the home their primary residence first shot at purchasing a foreclosure within 30 days of its listing.
Typically, these buyers are up against multiple cash offers -- anywhere from five to 20 -- on homes priced below $150,000, said Noah Herrera, president of Nevada Association of Hispanic Real Estate Professionals.
At least 50 percent of foreclosure sales in Las Vegas are cash-only transactions, he said.
"We're seeing investors come back in droves, all the real estate seminars in Las Vegas," Herrera said. "We've got literally thousands and thousands of prequalified buyers right now sitting on the sidelines. If you're the bank, what are you going to look at -- a cash offer that is very close or financed?"
The bank will almost always take the cash offer because there are no contingencies, no appraisal required and no conditions such as the pending sale of another home, he said.
All-cash, owner-occupant purchases will require certification as an addition to the Fannie Mae purchase addendum. Properties that go to contract before the end of the 30-day period and subsequently fall through will be relisted with a new 15-day marketing period.
First Look will help get more owner-occupants into Fannie Mae foreclosure homes, which make up the bulk of the market in Las Vegas, Realtor Steve Hawks said.
"This will finally give some hope to homeowners that are losing out to investors," he said. "This will greatly help the local market and stabilize the community again."
Banks are not committed to taking the first offer and have certain rules to follow as third-party loan servicers, said Jumana Bauwens, spokeswoman for Bank of America in Los Angeles.
A majority of the 14 million home loans in Bank of America's portfolio are owned by investors, dating back to when they were originated by Countrywide Mortgage, she said. Those loans were sold on Wall Street to investment firms and pension funds.
"So when it comes to short-sale transactions, we can't just approve it up front. We have to get the investors to approve it," Bauwens said. "It's a little less complicated for foreclosures, but there's still rules to follow."
Fannie Mae Chief Executive Officer Michael Williams said the 30-day period could later be replicated across the country if it succeeds in Nevada. He estimated the potential cost of carrying the properties on the books for a longer period of time at $60 million nationwide.
"However, given the unique market conditions in Nevada, we found it to be cost-neutral to extend the grace period from 15 to 30 days across the state," Williams wrote in a letter to Sen. Harry Reid, D-Nev. Reid had requested the extension after a meeting with Herrera in Washington.
Herrera said investors have been pulling money out of their "hemorrhaging" market portfolios and directing it toward Las Vegas real estate.
"Things are starting to change," he said. "To bring sustainability into the community, we need people living in the house."
More information on the First Look initiative and Fannie Mae-owned properties can be found at www.homepath.com.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Comments
Terms & Conditions
The following comments are provided by readers and are the sole responsiblity of the authors. The Review-Journal does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please use the Report Abuse button.
Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 24 hours. Please do not submit a comment more than once.
Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.
RSS
Twitter
Facebook
Of course cash offers are accepted before a pre-qualified buyer. The Wall Street scheme is working and working well to drain the economy of its' cash.
And what does healthcare have to do with housing??? You won't find the answer to that question in sneaky Reids' TV ads.
For every home sold after Septemebr 2010, the seller will be paying an additional sales tax increase of 3.8%.
Blah, blah, blah. If there were enough jobs available here, filling the houses with owner occupants would not be a problem. I don't see anybody trying to touch that problem. This "first look" nonsense is not going to help anything.
Stupidity at it best, most of the forclosed homes will not pass inspections or appraisals,why keep them in the market for an additional month? Then, some of the ones that would pass inspections or appraisals may be broken into and have the copper tubes and wires stolen. Let the investors pay cash for them, that way there would be no loan problems in the future, if investors make a lot money, great!!, they will spend some here and if they lose their money, too bad, at least they had already paid transfer tax, title, insurance, etc. Let the market take care of itself, that's how capitalism works.
Baby, I know how you feel. As a Agent, I presented a full price FHA offer for my Buyers- rejected. Then back on the market, same offer-rejected, this offer was presented 4 times-all rejected. The property finally closed 90 days after our first offer for $8,000 less that we had offered. Believe these banks are terrible to work with. I have been in the business 30 years and this is the worst I have ever seen!!!