A number of Phoenix pre foreclosure homes will be auctioned off by Fannie Mae as the federally-controlled mortgage agency tries to find more ways to cut down the number of properties in its books.
Over 85 residential units will be auctioned off by Fannie Mae in the first weeks of April. Through foreclosure auctions, Fannie hopes to reduce more quickly its foreclosure inventory. Freddie, following the decision of Fannie Mae, also scheduled an April auction for almost 300 foreclosed residential properties in Southern California and Las Vegas.
Federal officials and legislators have been debating the financial conditions of these two agencies as they continue to bear more losses from record numbers of delinquent mortgages and foreclosure properties.
As of the end of December 2009, these two agencies were still holding large numbers of foreclosures despite selling off almost 200,000 foreclosed residential properties throughout 2009. At the end of the year, Fannie and Freddie still had over 131,000 foreclosed properties in their books.
The foreclosures in Phoenix that will be auctioned off by Fannie Mae in the city will include ranch properties, single-family homes and townhouses. Phoenix pre foreclosure homes will also be sold off as more distressed homeowners decided take advantage of the enhanced short sale program.
Aside from protecting their credit scores from being lowered sharply, homeowners opting for short sales can receive relocation assistance, a benefit they will not gain if they wait for lenders to foreclose on their properties.
Fannie and Freddie are also offering other benefits for buyers of their properties. Fannie has decided in January to provide closing cost assistance which can reach 3.5 percent of the final home price. With the enhanced federal tax credits and the still low mortgage rates, homebuyers can gain a lot by buying Fannie and Freddie foreclosed homes now.
In the scheduled Fannie Mae and Freddie Mac foreclosure auctions in Phoenix, Las Vegas and Riverside in California, homebuyers who are eligible for government assistance will be given priority. The agencies wanted to cut down their foreclosure inventories, but at the same time they desired to help fulfill the home ownership goals of families who have not bought their own homes.
According to Jim Park, whose firm New Vista Asset Management helped design the auctions for a targeted market, owner-occupant buyers will have the opportunity to take advantage of lower-priced Phoenix pre foreclosure homes and foreclosed properties during the special auctions.