America's Federal Housing Finance Agency has approved a giant residential real-estate auction at Fannie Mae (the Federal National Mortgage Association) to help the mortgage giant unload its inventory of 122,616 foreclosed houses.
As yet no date has been set for the mammoth auction, but it is the first time that US regulators have allowed Fannie Mae to sell houses in bulk.
Corporate bidders will have to have at least $5 million in assets in order to take part, while private individuals will have to have an income of more than $200,000 per annum. All of the bidders will have to have a proven track record as successful landlords, especially as many of the homes included in the auction are currently occupied by tenants whose landlords have not been able to keep up mortgage repayments. Buyers will also not be able to sell the properties on straight away. Instead, they will have to rent out the homes for an as yet unspecified number of years before they can sell.
These conditions are hoped to strengthen the US property market and allow Fannie Mae to achieve its core aims of keeping money flowing to mortgage lenders, strengthening the U.S. housing and mortgage markets and supporting affordable homeownership.
“Our mandate is to keep money flowing to mortgage lenders and to make sure people can buy or rent housing. We have one of the largest foreclosure prevention operations to help struggling homeowners keep making their mortgage payments and avoid losing their homes.” said a spokesman for the company.
The pilot auction will come from areas hard-hit by the downturn such as Atlanta, Chicago, Detroit, Fort Lauderdale, Las Vegas and Los Angeles.
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