“This is another important milestone in our initiative designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of REO properties in the marketplace,” said FHFA acting director Edward DeMarco in a press release.
While the prequalification phase began several weeks ago, investors can nowmove to the next phase, where, if accepted by proving financial capacity and experience, they can get access to the properties for sale. The bulk of the properties are in the most distressed markets, such as Florida, parts of California, Phoenix, and Las Vegas. Atlanta, however, has the highest number in the mix, 572 properties making up 23 percent of the total up for sale. Atlanta housing was hit hard by the recession and high job losses. Just 17 percent of the properties are vacant, so investors would largely be getting assets with existing cash flow.
As these first properties hit the market, there is no shortage of investors ready to scoop them up. Rental demand is still surging, and rents continue to rise, despite record high affordability and record low mortgage rates. Nearly 47 percent of all closings in January were of distressed properties, according to a new survey from Campbell/Inside Mortgage Finance, and investors now make up nearly a quarter of all buyers, according to the National Association of Realtors.