Is Fannie Mae the Nation’s Largest Homeowner?

With $5 billion in homes, it’s gotta be close. Imagine having to dispose of $5mil in inventory across all 50 states, much of which is in less-than-perfect condition. Not a job that I would want to have, but Fannie Mae is working with almost 5000 real estate agents nationwide to move the foreclosed homes, although it is a slow slog and in some cases they cannot give property away. Case in point is illustrated in yesterday’s Bloomberg article: “Fannie Mae…couldn’t find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Michigan. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000. Megie still couldn’t sell it.” Of course you have to read the whole article to find out that the home is in an area full of foreclosures, and has no plumbing and needs a new roof.

Apparently, Fannie Mae wants to get the most bang for their buck, presumably looking out for the neighborhood interests. By giving property away at a lower price, the whole neighborhood loses out, but while this may be admirable in a normal market, it is short-sighted today. When there is a glut of homes available, and they sit too long, that brings down the value of a ‘hood just as fast. Not to mention that Fannie Mae does not employ handymen and gardeners, so upkeep on homes that sit on the market is minimal, and vandalism does occur, particularly in heavily foreclosed neighborhoods. I don’t know what the answer is, but I do know you may be able to get a good bargain over in Flint, Michigan.

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