The Federal Housing Administration, which sold more than 102,000 government-owned homes in fiscal year 2011, expects to sell that many again in the new fiscal year.
“We’re right in the 100,000 target range again this year,” Tom Rose of the FHA’s Santa Ana (Calif.) Homeownership Center said at the National Association of Realtors’ annual convention in Anaheim.
The insurance fund sold a record 102,195 units in FY 2011, according to Rose, who is director of real estate owned for FHA, working out of the agency’s California office. “We’ve never cracked the six-digit level before, so it was a monumental year for us.”
In the process, the agency returned more than $7 billion to the Treasury, Rose reported. “We sell a lot of houses,” he said.
But in doing so, the FHA also paid almost $430 million in real estate commissions to agents who found buyers for the houses it repossessed, Rose noted. And it takes in only about half of what it pays out in claims on each property, he added.
The FHA pays the standard 6% commission, and every house is sold through a Realtor. In that the agency makes no cosmetic repairs to foreclosed properties – only emergency repairs to assure units are safe and secure are allowed – and that its “whole mission” is to get foreclosed properties “out of our hands” as quickly as possible, Rose said the process “puts a lot of pressure” on agents.
The process of reselling REO takes 5.5 months on average nationally from acquisition to closing, according to Rose. But he said his shop is currently moving properties “in and out” at a crisp 120 days or less.
Daily Briefing | Monday, November 14, 2011
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