FHFA Modifies Fannie Mae and Freddie Mac REO Sales Requirements
The Federal Housing Finance Agency (FHFA), on November 25, directed the Government-Sponsored Enterprises Fannie Mae and Freddie Mac (GSEs) to amend their rules on the sale of real estate-owned (REO) properties currently under their control. Under the new policy, the GSEs will be able to sell existing REO properties to any qualified buyer based on the property’s fair-market value, as determined by the GSEs.
Before FHFA issued this directive, the GSEs required homeowners who wished to buy their homes back after losing them through foreclosure to pay the entire amount owed on the mortgage. The new policy allows these home buyers to instead pay the fair-market price, which already applies to other parties interested in purchasing REO properties.
The new rule is limited in scope and applies only to the GSEs’ inventories of REO single-family homes as of November 25, 2014. FHFA’s news release announcing the policy states that the GSEs have approximately 121,000 of such properties between them.