Fannie Mae: Selling In A Tricky Market

Selling a home in a down market like this one is not a prospect that appeals to many homeowners. But what about selling nearly 65,000 of them?
That is the task Fannie Mae faces as it repossesses houses that have been through foreclosure. As the owner or guarantor on a third of all of the nation's home loans, the mortgage giant has to take over, renovate and sell a growing number of properties.


"Our No. 1 strategy is to sell them one-by-one," says Gabrielle Harrison, Fannie Mae's vice president of foreclosure sales.


But that strategy is both time and cost intensive. Many of the homes are left in disrepair, or have been vandalized as former owners move out.


Selling Foreclosed Houses
On average, Harrison says, the company spends about $10,000 per property to fix it up for sale. Then Fannie Mae has to assess the price and manage the sale. In all, Harrison says, it's taking the company an average of 90 days to sell a home — even in some of the nation's most distressed areas like California, Nevada and Florida.


The real challenge for Fannie Mae, which since last year has operated under government conservatorship, is that it has two mandates that sometimes conflict. On the one hand, it wants a quick sale so it can reduce its exposure to the housing market. On the other hand, it doesn't want to price homes so low that it ends up undercutting the prices of other homes.


"Our main philosophy is to preserve communities and maintain property values," Harrison says. Doing so, she says, means identifying the exact right price for each home.
Arriving at that price, however, can feel like pinning down a moving target.

Since market prices are so low now may just be the "perfect time to buy!"

Part one of this story, "Fannie Mae Specialists Work To Save Troubled Loans" can be found at: http://www.npr.org/templates/story/story.php?storyId=102014309
This article appeared on NPR's
Morning Edition, March 19, 2009 ·
written by: Yuki Noguchi



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