Dec 102015
 

NAr couldn’t care less about the greater good. They lobby for their own narrow interests, irrespective of the impact it will have on the housing market, the rental market, or the broader US economy. Their latest self-serving battle is against bulk REO sales. Obviously, they don’t want to lose MLS commission sales to bulk transactions which generate no commissions to them. There is no other reason to oppose these bulk sales.

Bill would stop bulk REO sales in California

NAR backing sponsor Gary Miller’s reelection bid

By Inman News, Friday, May 18, 2012.

California Rep. Gary Miller — who’s getting major backing from the National Association of Realtors as he runs for reelection to Congress in a new district — has introduced a bill that would put the brakes on bulk sales of Fannie Mae real-estate owned (REO) homes in the state. H.R. 5823, the “Saving Taxpayers from Unnecessary GSE Bulk Sale Programs Act of 2012,” would prevent Fannie Mae and Freddie Mac’s regulator, the Federal Housing Finance Authority (FHFA), from implementing a pilot program to sell Fannie Mae-owned properties in California to institutional investors for conversion to rentals. “We are hearing from our members that housing supply is extremely tight, with REO inventory being especially low at only a two-month supply,” California Association of Realtors President LeFrancis Arnold said in a statement welcoming the bill’s introduction. Arnold said California home buyers “already are competing with small investors and encountering multiple offer scenarios.”

Inventories are tight because lenders are withholding REO inventory. It’s also why prices are firming and a short-term bottom is being put in place. If lenders don’t sell these in bulk, and instead release them for sale on the MLS, it will generate more real estate commissions, but it will also put a great deal of distressed property on the market and likely cause prices to go down again. Obviously, realtors care less about rising prices than they do about commissions.

Last month, 19 members of California’s congressional delegation sent a letter to FHFA objecting to bulk sales of repossessed homes to investors for conversion to rentals. FHFA has said it will only approve bulk sales in markets where there’s no shortage of homes on the market. The first “REO to rental” sale of 2,490 Fannie and Freddie “real estate owned” (REO) properties will be limited to eight markets: Atlanta (572 properties); Los Angeles-Riverside, Calif. (484 properties); Phoenix (341 properties); Las Vegas (219 properties); Chicago (99 properties); Southeast Florida (418 properties); Central and Northeast Florida (190 properties); and Western Florida (167 properties).

Today, there is a shortage of homes for sale in Las Vegas.

Miller, a Republican who currently represents California’s 42nd Congressional District — which includes parts of Los Angeles, Orange, and San Bernardino counties — is seeking reelection in the 31st District, after his current district was redrawn in favor of Democrats. According to Federal Election Commission filings, the National Association of Realtors has made more than $500,000 in independent expenditures to help Miller establish his name in the district he hopes to represent, which includes Rancho Cucamonga and Redlands. NAR’s Congressional Fund this year has spent $136,314 on Miller’s behalf through the end of May, including $118,385 on a direct mail campaign. On May 9, NAR’s Realtors Political Action Committee (RPAC) dropped $396,000 on TV ads supporting Miller in the June 5 primary (the expenditure was reported twice, after it was originally filed as an expenditure in the 42nd District by mistake).

The NAr owns Mr. Miller. He has prostituted himself to them in a last gasp to retain a seat in the House of Representatives.

… NAR, which has raised dues for its nearly 1 million members by $40-a-year dues in order to raise $80 million in “soft money” for political advocacy at the local, state and federal level this year and next, held a “Rally to Protect the American Dream” in Washington, D.C. Thursday that attracted an estimated 15,000 Realtors.

Bulk sales of REO to investors would keep house prices from falling because each home sold in the portfolio is one less distressed sale on the MLS. realtors ostensibly want price stability, but based on their vehement opposition to bulk sales, they obviously prefer commissions to rising prices.

Milking the cash cow

The owner of today’s featured fixer bought the property with very little of his own money, made an illiegal conversion to a rental unit, extracted hundreds of thousands in HELOC booty, and skimmed the rent until the bank finally foreclosed. He obtained maximum financial benefit from this property and left the lender holding the bag. I have a sneaking admiration for this guy. He worked the system and obtained a huge return on his investment. Of course, its unethical, shameful, and in the long run, stupid, but it’s great while the Ponzi scheme lasts. As it stands, this property has great flip potential. It’s an all cash deal, and it requires extensive renovation to restore it to code, but it’s priced about $200,000 under market, so there is room to make improvements.

  • The former owner paid $640,000 on 1/14/2004. He used a $511,900 first mortgage, a $95,800 second mortgage, and a $32,300 down payment.
  • On 3/7/2006 he refinanced with a $806,250 Option ARM and obtained a $161,250 HELOC.
  • Total mortgage debt was $967,500 assuming he maxed out the HELOC.
  • Total mortgage equity withdrawal was $359,800. Pretty good money for two years ownership.
  • He defaulted in late 2009, and he was able to skim rent for all of 2010 and 2011. According to the listing, the rent on the two units amounted to about $3,000 per month. Consider the $72,000 in skimmed rent a going-to-foreclosure present from the lender.


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 Posted by at 2:24 am

  One Response to “California realtors buy politicians to lobby against lost commissions from bulk sales”

  1. California realtors buy politicians to lobby against lost commissions from bulk sales – https://t.co/LLVMWCkpcz

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